There is little sign of any sunshine in consumer sentiment this summer – the headline GfK measure fell for the fourth successive month, down 1 point to –19. It is the lowest level since last December and 6 points below its measure a year ago.
Only the measure of households’ finances in the next 12 months improved – edging up 1 point to –2, although lower than a year ago (+1). All the other measures comprising the headline index fell. Economic optimism – the driver of improving sentiment for much of last autumn and the first quarter of 2010 – fell 3 points to –12, its lowest score since May 2009. Both backward looking measures - of household finances and the economic situation over the past 12 months - slipped by 1 point to –14 and –46 respectively.
With austerity the new economic backdrop, fewer consumers feel the spending climate for making major purchases is right – the measure falling from –21 to –24, its lowest level since last August.
Growing media speculation about the impact of the June budget on jobs is reflected in a big jump in unemployment expectations. The proportion of adults expecting unemployment to rise in the next 12 months is up from 64% to 69% on the month and from a post-recession low of 55% in March. It is well below a year ago when far more people were pessimistic about jobs (80%).
Some positive features were an improvement in inflation expectations – possibly brought about by some easing of pump prices – and of a slight improvement in the current financial situation of households.
This survey was taken before the Emergency Budget with the initial consumer response to the new age of Budget-induced austerity in next month’s survey.
For more detailed information on the mood of the consumer JGFR produces a UK Consumer Confidence Monitor covering the whole of the adult population aged 16+ and a High Earners Consumer Confidence Monitor covering households earning £50,000 and over.
For details contact John Gilbert on 0208 944 7510 / 07740 027968
* Survey undertaken by GfK NOP among 2,000 adults aged 16+ between June 4-20 on behalf of The European Commission.