Sorting Through the Mixed Signals On Consumers’ Post-War Attitudes

A post-war economic boom would have been nice, but marketers might have settled for some clarity about consumers’ attitudes. We can safely say that consumer confidence went up in March once the war in Iraq began. But was this just a momentary blip or the start of a trend? That’s where the story gets murky, though considerable evidence backs the just-a-blip school of thought.

As early as April 30, an report on the ABCNews/Money Consumer Comfort Index was headlined “Rally Over.” The text’s opening sentence: “A month-long surge in consumer confidence ended with a sharp snap this week, putting an unceremonious end to hopes of a sustained rally.” Just the day before, though, The Conference Board noted that the April rise in its Consumer Confidence Index “may very well signal a turnaround in confidence and a more favorable outlook for consumer spending.” Splitting the difference, a report released last week by Ipsos-Public Affairs said its index of consumer sentiment dipped a bit, but still stood well above its March low. Don’t take that to the bank, though, because Gallup last week said its polling shows “that the American consumer’s assessment of current economic conditions is just as bad as it was in March.” The seeming rise in consumer confidence, Gallup suggested, “is more illusory than real.” In one of its Tuesday Briefings, Gallup noted that consumers who plan to increase their spending in the next six months (19 percent) are outnumbered by those planning to reduce their outlays (28 percent). While hard data on retail sales may seem like a firmer indicator than consumers’ self-assessments, those numbers are open to varied interpretation. If people spent less in April (as the Commerce Department says they did), that might be good news, since they still have the unspent cash and may spend it next month. Or it could be bad news, signaling that people are going into austerity mode. Or it might mainly reflect the decline in gasoline prices, which (if it persists) will free up funds that people can spend on other things.

Amid such uncertainty, some marketers will concentrate on consumer cohorts that display above-average confidence. In a new survey by the Pew Research Center for the People and the Press, men were more likely than women to foresee an economic turnaround in the next year (48 percent vs. 37 percent). A CBS News/New York Times poll found Republicans far more likely than Democrats to say the economy is getting better (37 percent vs. 9 percent). So, if marketers can pitch their wares to Republican men, they might just survive these rough economic times.