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29 May 2008
Schaumburg, IL
Eighty-five percent of U.S. consumers believe the country is currently in a recession and U.S. consumer confidence in the economy plunged 17 points from the second half of 2007 to the first half of 2008, according to a new online survey by The Nielsen Company.
Not surprisingly, 35 percent of U.S. consumers consider the economy their biggest concern over the next six months. Debt comes in a distant second place at 15 percent, followed by work/life balance (8 percent). International affairs, such as war and terrorism, rank near the bottom of the list (two percent and three percent, respectively). Even immigration, a hot button political issue, is only cited by two percent of respondents.
“With high gas prices, food inflation and other economic pressures, it’s not a surprise that the economy is a top concern for many Americans,” said David Parma, global head of Customized Research, The Nielsen Company. “Consumers have many reasons to feel pessimistic right now and even if we’re not officially in a recession, consumers certainly feel like we’re in one.”
Overall, Americans’ view of the economy is bleak. Sixty-six percent of U.S. respondents have a pessimistic view of their local job prospects over the next 12 months, with 50 percent saying it’s not so good, and 16 percent calling it downright bad. Just three percent consider it excellent.
Looking for the Silver Lining
So far, this negative view of the U.S. economy appears not to have tainted most Americans’ views of their own financial affairs. More than half (51 percent) say the state of their personal finances remains excellent or good, while just over one-third (36 percent) rank their situation as not so good. For the most part, U.S. consumers are not convinced the world will enter a global recession sometime in the next 12 months. Thirty-eight percent say they don’t believe it will take place, while 46 percent don’t know. Just 15 percent say a global recession is definitely on the horizon.
Should the economy take a turn for the worse, inflation tops U.S. consumers’ concerns (62 percent), followed by unemployment (50 percent), falling property prices (25 percent), and interest rate increases (21 percent).
Managing Extra Cash
While government officials are hopeful this spring’s tax rebate checks will stimulate the economy, consumers appear to view any potential windfall more as a means of digging out of debt than for splurging on goods.
Sixty-nine percent of U.S. consumers believe the next 12 months are either a bad or not so good time to buy things they want or need. Once they’ve covered essential living expenses, 41 percent use spare cash to pay off debt, credit cards, or loans. More than a third (36 percent) play it safe, putting extra funds into savings. Nearly a quarter of consumers (24 percent) report having no spare cash.
According to Nielsen’s research, just 21 percent use such money for home improvements/decorating, while 19 percent opt for out-of-home entertainment or holidays/vacations. Shopping sprees rank low on their list of priorities, with 17 percent buying new clothes and 10 percent splurging on new technology. Few respondents have their eye on the future – just 11 percent put extra money into a retirement fund, while nine percent invest in shares of stock/mutual funds.
“These findings are really telling in that consumers are clearly feeling gun-shy when it comes to spending or investing,” said Parma. “While it’s definitely a good move for consumers to pay off their personal debt, it will likely do little to jumpstart the economy.”
About The Nielsen Global Online Consumer Survey
The Nielsen Global Online Consumer Survey, conducted by Nielsen Customized Research, was conducted in April 2008 among 28,153 Internet users – including 1,000 U.S. consumers – in 51 markets from Europe, Asia Pacific, North America and the Middle East. The largest half-yearly survey of its kind, the Nielsen Global Online Consumer Confidence and Opinion Survey provides insight into current confidence levels, spending habits/intentions and the major concerns of consumers across the globe.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing information (ACNielsen), media information (Nielsen Media Research), online intelligence (NetRatings and BuzzMetrics), mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in Haarlem, the Netherlands, and New York, USA. For more information, please visit, www.nielsen.com
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