How’s the U.S. consumer doing?
Deloitte published its "State of the US consumer" report for July
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.
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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.
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Consumers’ intentions to spend in discretionary categories (i.e. travel) rose in July but remain below 2021 levels.
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Meanwhile, non-discretionary spending intentions (i.e. housing) have surpassed 2021 levels.
Synchrony CEO Brian Doubles echoed the spending trend on a recent call, noting that lower-income consumers are “rotating into non-discretionary categories.”
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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.
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“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.
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“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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