HVAC buying indicator dips this spring, still up from 2022

Fewer U.S. consumers felt it was a good time to buy large household durables during the first two months of the second quarter, compared to last year, according to the University of Michigan’s latest consumer data published Friday. But it’s no reason to sound the alarm yet. 

Why it matters: Every month, over 1,000 Americans in a survey tell the university whether they think now is a good or bad time to buy ‘major household items,’ including appliances, providing one of the closest available measures of purchasing intent for HVAC systems. 

What’s happening: In April, the share of respondents who said it’s a ‘good time’ to buy fell 22 percent compared to last year, while the percentage saying it’s a ‘bad time’ jumped 38 percent. In May, good-time responses were flat, but bad-time responses rose 10 percent. 

• But, but, but: Despite the dip, consumers still feel more inclined to buy large household items than they did a few years ago. 
• From January through May, the share of good-time responses remained higher every month compared to the same months in 2022. 

What they’re saying: U.S. consumer sentiment sits “about 18 percent below December 2024, right after the election,” Joanne Hsu, the university’s survey director, wrote Friday. “[C]onsumer views are still broadly consistent with an economic slowdown and an increase in inflation to come.”

The big picture: While sentiment is down, as Hsu noted, and more consumers are falling behind on their credit card payments, other metrics tell a more positive story. 

• Consumer spending and personal incomes are up 17 and 26 percent, respectively, over the past five years, according to the Bureau of Economic Analysis, while unemployment remains low. 
• Meanwhile, the average U.S. FICO score, a key indicator of consumers’ ability to obtain financing, hit 715 in April, the latest available data — “still near historical highs,” writes FICO’s Tommy Lee. 

What’s next: June’s consumer sentiment data, including responses about buying large household durables, will be released in July.