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American consumers are feeling more financially secure: survey

Services categories saw the greatest boost in Q2

US consumers

American consumers are feeling more financially secure: survey. Source: pexels.com

According to The Conference Board Global Consumer Confidence Survey, US consumers reported spending more and cutting back less across a range of categories in Q2 2021.

For instance, while 54% still report cutting back on expenses in Q2, that proportion was down from 62% in Q1 and 64% a year ago.

Overall, Q2 saw US consumers' pandemic-fueled concerns about health, the economy, and job security ease. At the same time, people's worry about climate change, which was temporarily eclipsed by pandemic-related concerns, has resurfaced. Given extreme weather events across the world, this concern may continue rising going forward, challenging companies to enhance and accelerate their sustainability agenda and collaborate with industry peers—and governments—to find solutions
Denise Dahlhoff, Senior Researcher at The Conference Board

At the same time, 16% of the respondents named the economy their top concern over the next 6 months. That’s still the highest overall, but down 9% compared to Q1. The proportion naming health (14%) and job security (9%) their top concerns also fell in Q2, by – 4% and – 1%, respectively.

The share of consumer spending on discretionary categories was up across the board in Q2 2021 – as investing continued to go mainstream.

In addition, 1 in 5 Americans put money into investments in Q2 – a peak level fostered by low-interest rates, record stock-market performance, and stimulus payments. While the growth of retail investing was fueled earlier in the pandemic by a dearth of alternatives to spend on, the trend continued in Q2 even as spending elsewhere rebounded.

Services categories saw the greatest boost in Q2, as pandemic mobility restrictions and capacity limits eased.

In fact, 32% of consumers reported spending on holidays/vacation travel, up +7% from Q1. Likewise, 19% was spent on out-of-home entertainment (+6%).

Spending across a range of goods also grew strongly as many people want to refresh their wardrobe and have the financial means, even for bigger-ticket items. For instance,  In Q2, 27% of consumers reported spending on new clothes (+4%), 26% spent on home improvements/decorating (+5%), and 18% spent on new technology products (+5%).

What is more, US consumers are feeling more financially secure. The latest stimulus package and an improving economy and job market have provided a boost: the percentage of people without spare cash dropped sharply (−9%) from the prior quarter. This bodes well for near-term spending.

We’ve reported that 70% of European consumers embrace live shopping.

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