Consumers were optimistic about the U.S. economy's recovery prospects heading into the summer but most of them plan to keep pulling back their spending for the near-term, according to a poll conducted by 451 Research, an offering of S&P Global Market Intelligence.
According to the latest edition of "The Voice of the Customer Macroeconomic Outlook, Consumer Spending" survey, 52% of respondents said that they expect economic improvement over the next 90 days. That's the first time since February that more people believed that economic conditions were getting better rather than worsening. 451 fielded the survey of 1,062 consumers between June 1 and June 19. It is also the first time a majority of respondents saw the near-term economic picture improving since January 2018.
May and June brought a relaxation of stay-at-home requirements and reopenings at retailers, restaurants and bars, allowing some consumers to return aspects of their life to normal and "get slightly distracted from COVID," said Sheryl Kingstone, research vice president at 451.
But new spikes in coronavirus cases, particularly in states like Texas and Arizona, could corrode that optimism. "Now that we're starting to see a second wave hit," she said, "the stock market is getting a little bubbly."
Despite the upswing in optimism, a majority of consumers — 56% — said that they were planning to spend less over the next 90 days than during the same period last year, with just 14% planning to spend more. 451's survey focuses on high-earning consumers, and about half of those polled in June had annual incomes of over $125,000. Most of the respondents are located in North America.
Consistent with the survey's May findings, consumers remain interested in returning to physical stores, hair salons and other service-focused businesses as soon as possible while avoiding air travel, sporting events and other activities that involve mass gatherings for the near-term. Stores from Macy's Inc. to Best Buy Co. Inc. reopened stores in May and June, employing virus control strategies ranging from asking customers to wear masks in-store to requiring appointments in order to shop.
Early evidence suggests that customers have returned to at least some stores in the weeks since reopening began. Growth in online grocery orders has slowed, and analysts at UBS have estimated that U.S. grocery store foot traffic approached pre-pandemic levels in June. But another shutdown due to an increase in coronavirus cases, as well as the end of expanded federal unemployment benefits in July, could deflate a nascent economic recovery.
On other aspects of living with the pandemic, respondents to the June survey were more evenly divided. Forty-four percent of respondents said they would either definitely or probably opt in to contract tracing that uses location data from their mobile phone, while 43.4% said they definitely or probably would not consent to such tracing. Just under 13% were undecided.