How's the U.S. consumer doing?

Accounting giant Deloitte last week published its “State of the US Consumer” report for July, giving an up-to-date look at consumer financial health.

• Findings are based on a monthly survey of 1,000 consumers nationwide. 

Why it matters: Consumer financial health impacts businesses across all industries, including HVAC.

Highlights: Overall consumer spending hasn’t moved much this year, up only 0.3% since year-end 2023.

• Consumers’ intentions to spend in discretionary categories (i.e. travel) rose in July but remain below 2021 levels.

• Meanwhile, non-discretionary spending intentions (i.e. housing) have surpassed 2021 levels.

• Full report. 

Synchrony CEO Brian Doubles echoed the spending trend on a recent call, noting that lower-income consumers are “rotating into non-discretionary categories.”

• Purchase volume in its “Home & Auto” segment, which includes HVAC, also dropped by 3% year-over-year.

Of note: “Since September 2022, the percentage of higher-income respondents that say their financial situations improved over the past year increased to 74%,” the report says.

• “However, sentiment remained significantly lower and relatively unchanged among middle- and lower-income respondents,” it adds.

Yes, but: Consumer confidence inched up in July, driven by a more positive future outlook.

• “Compared to last month, consumers were somewhat less pessimistic about the future. Expectations for future income improved slightly,” said economist Dana Peterson.

The bottom line: Despite the ebbs and flows, “financial and spending sentiment show signs of optimism,” Deloitte said.

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