Let's Talk Business: Consumer Confidence Heading into the 4th Quarter 2023
Last week the University of Michigan released their US Consumer Confidence sentiment rating of 63 for October indicating a more than five-point decline from 68.1 in September. Stick around for a quick over view of what the Consumer Confidence sentiment score is and what it means for the upcoming 4th quarter shopping season.
In 1952 researchers at the University of Michigan created an index of Consumer expectations that focuses on three specific areas:
1) How consumers view prospects for their own financial situation
2) How the view prospects for the general economy in the near term
3) How they view the prospects for the economy long-term.
Each month a minimum of 500 interviews are conducted of a statistically designed group representing the 48 contiguous U.S. States. Consumer attitudes and expectations are tracked through a survey of approximately 50 questions. Scores have been calculated monthly for 71 years with an all-time high score of 111.40 in January of 2000 and an all-time low score of 50 in June of 2022.
Last year may prove to be a good benchmark for area retailers as consumer confidence was still working its way back heading into the 4th quarter, with the October 2022 score at just 59.9. Nationwide 4th quarter 2022 retail sales were down just 0.3% from 3rd quarter receipts. With similar levels of confidence, retailers may see a flatlining of retail sales activity to wrap up 2023.