Americans are feeling optimistic that life is gradually getting back to normal. After living in crisis mode for more than a year, most people are tired of staying close to home. They are starting to shop more and resume their typical activities. However, Americans also believe we should continue to safeguard our health and follow safety precautions—including wearing masks. These are some of the opinions respondents shared in a recent Nielson Audio consumer lifestyle survey. People who go out frequently are also ready to spend more on non-essentials. They’re confident they can minimize their risk by practicing safe habits when they’re away from home.
As more people get vaccinated, the concern about interacting with others will continue to diminish. Overall, consumers anticipate more in-store shopping in the months ahead. With fewer restrictions, they plan to do less in-store and curbside pickups and reduce their deliveries from local stores. This behavior change is good news for small businesses.
Hopeful 2021 is the Year of Change
Fifty-five percent of respondents 18 and older believe this is the turnaround year for resuming our lives. Men are more optimistic than women (63 percent) compared to 49 percent for women. Consumers are ready to open their wallets as economic conditions improve, and the unemployment rate drops. In April 2020, the unemployment rate peaked at 14.7 percent. This February, the Bureau of Labor Statistics reported a rate of 6.2 percent.
“Consumer Confidence increased to its highest level since the onset of the pandemic in March 2020,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions and their short-term outlook improved significantly, an indication that economic growth is likely to strengthen further in the coming months. Consumers’ renewed optimism boosted their purchasing intentions for homes, autos, and several big-ticket items. However, concerns of inflation in the short-term rose, most likely due to rising prices at the pump, and may temper spending intentions in the months ahead.”
More Savings and Less Spending
Covid-related restrictions caused many people to curtail their spending last year. Although consumers are encouraged to save and have a rainy-day fund, spending accounts for two-thirds of the economic activity in the U.S. It also signals that the country is getting back to normal.
- 40-45 percent of employed 18-49-year-olds saved more of their income
- 45 percent of adults 18-34 purchased $500 or more last year
- 40 percent of adults 18 and older plan to buy new or used vehicles
- 20 percent plan to buy a home in the next 12 months
As consumers feel more secure about their finances, they are willing to resume non-essential activities that they previously put on hold. Seventy-four percent of Americans surveyed are eager to return to the beauty salon or barbershop. Traveling is also at the top of the list at 73 percent. The only activity with a higher rating than both of those mentioned is not related to shopping. Attending a religious service was a priority for 75 percent of those surveyed.
After a slight increase in February, the consumer confidence index climbed from 90.9 to 109.6 in March. Consumer’s positive outlook on business and labor conditions is the highest reading in a year.
- Consumers who said business conditions are good increased from 16.1 percent to 18.5 percent
- Consumers who believe jobs are “plentiful” increased from 21.6 percent to 23.6 percent
The desire to spend money reflects the optimism consumers have about the future. However, it will take years to recover from the economic devastation caused by the pandemic. Yet, Americans are resilient, and their outlook has already improved in a short time. The expectation is the retail environment and business climate will be even better in the next six months.