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As we enter the critical holiday spending weeks, the US consumer is showing signs of strength, in a positive signal for retailers and other consumer-facing businesses.
Upper-income consumers (those earning $100k+/year), who represent the majority of discretionary spending in the US, are reporting particular strength.
- The upper-income consumer outlook score continues to trend higher—it’s up 2 points month over month and has increased 3.6 points over the last three months. The spending intent score for this group is also trending higher, up 1.2 points month over month and 7.1 points over the last three months.
- These positive trends, which have now been underway for multiple months, are likely linked to the rally in equity markets and upper-income earners’ investment portfolios. Barring a reversal in the markets, these consumers seem prepared to be a source of strength for the holiday retail season.
Lower-income consumers (those earning up to $50k/year) are reporting less robust but still positive trends in our data series. The spending intent score for this group jumped 5.3 points, month over month, and 7.6 points over the last three months. The lower-income outlook score, however, has been essentially flat over the last two months.
In contrast to upper- and lower-income earners, middle-income earners (earning $50–100k/year) show no signs of building strength. Both outlook and intent-to-spend scores for this group were essentially flat over the last month.
Bain and Dynata created the Consumer Health Indexes in 2017 to support business decision makers in their near- and midterm planning for their businesses. To achieve this, we have been asking questions that are within the expertise of the people taking our surveys. What are their personal spending plans? What are their saving plans? What is their use-of-debt plan? These are direct, easily understandable questions about survey respondents’ near-term expected behaviors. They require little interpretation, macroeconomic expertise, or filtering through the lens of the political or news cycle. Since 2017, our clients have been using our Consumer Health Indexes as a differentiated data point relative to existing confidence indicators.
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