GALLUP NEWS SERVICE
Once again, all eyes are on the consumer, as everyone tries to gauge the pace of economic recovery in 2002's second half. In part, this is because neither corporate profits nor corporate capital spending in the first half of the year have increased as many economic observers had hoped. As a result, consumer spending is once again left to drive any economic improvement.
Unfortunately, May's retail sales numbers showed their sharpest decline since November 2001. And, new Gallup Poll economic data (June 3-6) suggest that falling energy prices are not the only factor behind the weakness in consumer spending. During the first week of June, only 36% the public rated current economic conditions in this country as good or excellent -- down from early April (38%) and about the same as in early May (35%). Even more importantly, only half of all American consumers (52%) rated their own financial situations as good or excellent -- essentially the same percentage as in each of the prior three months. The fact is that while consumers are trying to remain optimistic about the economy's potential improvement, they are not seeing any real improvement in their own personal financial situations or in the country's economic conditions.
Of course, the key question is whether consumers will remain optimistic and continue to spend if real economic improvements in their own personal financial situations continue to be delayed. The failure of Gallup's economic data to show an improvement in consumer perceptions during the second quarter is not encouraging. The bearish sentiment that seems to be dominating Wall Street these days is actually discouraging.
Consumer Financial Situation Is Not Improving
Only 52% of American consumers rated their personal financial situations as good or excellent during June 2002. This is virtually the same as in May when 51% of the public provided this rating, and in March/April when 52% also provided this rating. It is below the post-Sept. 11 high of 56% (Dec 2001), and the same as in August 2001. That is, consumers have seen virtually no real or lasting improvement in their personal financial situations for nearly a year.
| Rating of Current Financial Situation |
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Still, Consumers Hope for Improvement
In June, the majority of American consumers (52%) continue to say their personal financial situations are getting better. This is down from the 54% to 55% of consumers who said their situations were getting better during March, April and May. It is also below the post-Sept. 11 high of 60% (Jan 2002) and only slightly better than the 50% who said their situations were getting better in October 2001.
| Is Your Financial Situation Getting Better or Getting Worse? |
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No More Feel in a Good Position to Buy
Only half of all American consumers (51%) say they are in a somewhat or very good position to buy things in June 2002. This is virtually the same as the percentage in May when 50% of the public said it was in a position to buy, and in April when 52% provided this rating. It is also the same percentage of potential buyers as in October 2001. Obviously, none of this is good news for the nation's retailers or for those hoping that the consumer will lead economic recovery in the second half of 2002.
| How Good of a Position Are You in to Buy Some of Things You Would Like? |
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Survey Methods
Results are based on telephone interviews with a randomly selected national sample of 1,010 adults, aged 18 and older, conducted June 3-6, 2002. For results based on this sample, one can say with 95% confidence that the maximum error attributable to sampling and other random effects is ±3%. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
