CR Index: 25% to spend more on personal electronics

A quarter of Americans–24.9 percent–expect to spend more this month on personal electronics, according to the Consumer Reports Index, a composite of five indices measuring consumer behavior, attitudes, and consumption patterns. And short-term plans to purchase major home electronics rose slightly, to 10.7 percent from 10 percent in October, the highest level since June.

In addition, perceived financial problems, including difficulties making credit-card payments and covering medical bills, may be stabilizing, according to the Consumer Reports Trouble Tracker and Stress indices, two components  of the Consumer Reports Index. In the West and South, survey respondents reported fewer troubles in early November than in the prior month. In the Midwest, perceived troubles appeared to be slightly (up 2.4) worse. Northeasterners’ opinions stayed about the same.

Those optimistic results are the bright spots in a report that generally shows consumer plans and attitudes at a slow simmer. Two weeks before the official start of the holiday shopping season, planned purchases were flat or lower in most categories, including appliances, yard and garden goods, cars and homes, according to the Consumer Reports Next-30-Day Retail Index. (The survey underlying the Index was completed before Congress extended and expanded a one-time $8,000 tax credit for new-home buyers.)

Ed Farrell, a director of the Consumer Reports National Researcher Center, which created the Index, posed a cautionary note. “The economy remains in a precarious position where further decline is possible but is slightly less likely,” Farrell said. “Unless consumers can see concrete improvements in their lives and retail activity picks up, any near term recovery is improbable.” 

For more details and information on how the Consumer Reports Index is conducted, click here.

The Great Recession: Where's the consumer's voice?

A report recently published by the not-for-profit Pew Research Center's Project for Excellence in Journalism reveals some interesting biases in the media when covering the Great Recession. For one, the report says that TV, print, radio, Internet and other news media focused an awful lot on players at the top–President Obama and his staffers, federal agencies, and business leaders–as opposed to folks at the bottom of the ladder, often suffering the most. The stimulus package, the banking bailout, and efforts to help the struggling auto industry were the dominant topics. Most coverage took place in New York and Washington, the capitals of finance and government, respectively. And when the stock market started to rise, coverage started to peter out. 

For that reason, I'd like to brag a bit about the monthly Consumer Reports Index, which asks consumers for their sentiment on the state of their own financial well-being. That includes not only what they spent and did over the prior month, but their spending plans for the next month. The index results are based on answers by a nationally representative sample. Stay tuned for the next index, about halfway through the month, for a unique gauge of what's going on close to the ground, not up in the vaulted realms of power.–Tobie Stanger

Consumer Reports Index: Consumers' mood low, troubles rise

Consumer sentiment remains low for many Americans, and consumers are reporting more financial troubles, according to the latest Consumer Reports Index, published today. Lower-income people—those making less than $50,000 a year—are shouldering more financial pain than the rest of the population. And consumers living in the Western part of the U.S report a worse financial outlook than do those in other regions. 

The Consumer Reports Index, a composite of several measures, shows consumer sentiment nationwide at 40.3, rising only slightly from a low, 38.1 last month. When the index is greater than 50, more consumers are feeling positive about their financial situation. 

At the same time, this month's Consumer Reports Trouble Tracker Index, which measures negative household financial events, rose to 66.7, its highest ever. The percentage of consumers who reported negative events dropped slightly, but the total number of negative events was up, from 1.6 to 1.9 per household, the greatest increase in 6 months.

Some details:

• Job losses mounted. The Consumer Reports Employment Index declined markedly in October. The proportion of respondents reporting job losses was 7.7 percent, compared with 5.6 percent last month.

• Lower-income households had more troubles than average. The Consumer Reports Trouble Tracker revealed that more than a quarter (26 percent) were unable to afford afford medical bills or medications in the past 30 days, versus 15.1 percent for all Americans. Twelve percent of this group lost a job or was laid off, compared with 7.7 percent of the general population. Another 12 percent lost medical care or experienced reduced coverage, compared with 7.2 percent of total respondents.   

• Spending stayed the same. The Consumer Reports Past 30-Day Retail Index shows purchases in the past 30 days about the same as in the prior month. The index was up for major appliances, but down for major home electronics and personal electronics. 

• Consumers plan to spend more for electronics, but not for other items. Planned purchases of personal and major electronics were up for October versus the prior month. In general, however, plans for future purchases remained about the same as our measure in September. 

• Sentiment was worst in the West. Consumer sentiment took a dive in the West, down to 32.8. In the North/Central region and the South, sentiment remained even, at 41.9 and 43.2. Residents in the Northeast reported a modest uptick in consumer sentiment, to 42.3.

"The economy is in a precarious position balanced between recovery and further decline," concludes the report, published by the Consumer Reports National Research Center. Without substantial improvements as measured by the Trouble Tracker, Employment and Retail indices, it adds, "it is doubtful that a meaningful consumer recovery will be mounted in this calendar year."

The Consumer Reports Index reflects results of a nationwide, representative survey of Americans conducted last week by the Consumer Reports National Research Center. To read more about the Consumer Reports Index, including how it was conducted, click here.

Consumer Reports Index: Credit card woes hurt consumer sentiment

Despite a rebounding stock market and promising economic indicators, consumers say they are feeling far worse about their finances than they have in the last seven months, according to the Consumer Reports Index for September.  Increased credit card, healthcare, and personal loan issues have contributed to stress levels, with 15.6 percent of Americans experiencing higher credit card interest rates and fees, and 8.5 percent losing health insurance or having their coverage reduced in August. 

On a positive note, consumer reactions showed the economy is no longer in freefall. Retail is stabilizing and consumers showed more interest in shopping for big ticket items like homes and cars. Employment improved significantly in August.  

The monthly Index—actually a composite of several indices—tracks trends in several areas of consumer sentiment, through responses from a nationally representative sample of households polled in August. Here are some of the key findings:

Consumers are facing more economic hardships. The Consumer Reports Trouble Tracker crept up to its highest level in the past seven months with almost 38 percent of Americans experiencing at least one major negative personal finance event in the past 30 days. For the sixth straight month, the ability to afford medical bills or medications remains the most prominent trouble Americans are reporting.

Lower-income households, earning less than $50,000 a year, were hurt most. In the past 30 days:

• 24 percent have been unable to afford medical bills or medications.
• 7.4 percent lost their job or were laid off.
• 12.2 percent lost or have reduced healthcare coverage.
• 14 percent missed a payment on a major bill (not mortgage).

Sentiment is declining. The Consumer Reports Sentiment Index is at the lowest level (38.1) since October ’08. When the index is greater than 50, more consumers are feeling positive about their situation. 

Small signs of life in shopping. The Consumer Reports Retail Index showed that purchasing in the past 30 days was up slightly for personal electronics and small appliances in the month of August compared to July, but flat for all other categories. Planned purchases in September are on par with August. 

Stress is up. When the Consumer Reports Stress Index is more than 50 consumers are feeling more stress than a year ago. It currently stands at 65.7, which is up from a year ago.

To read more about the Consumer Reports Index, including how it was conducted, click here.

Consumers aren't so upbeat, new Consumer Reports Index shows

Economists–and a stock market rally–may be heralding a turnaround in the American economy, but that news hasn't reached many consumers, say the latest results from our new Consumer Reports Index, launched today. The monthly Index, actually a composite of several indices, found consumers less in the mood for shopping for major and minor purchases than they were even four months ago. In fact, these most recent results for the Consumer Reports Index reverse upward trends in several aspects of consumer thinking, according to responses from a nationally representative sample of households polled between July 30 and August 2. Here are some details:

•We feel less well off than a couple of months ago. The Consumer Reports Consumer Sentiment index, which measures Americans' feelings about their personal financial well-being, was down to 41.1 from a high of 48.5 in June. A score above 50 represents optimism.

•We're facing increasing financial difficulties. The Consumer Reports Trouble Tracker Index found specific weak spots related to missed payments of major (non-mortgage) bills; credit-card interest rates and fees; and job losses and/or difficulty finding work. One in seven consumers had trouble affording medication or medical bills. (Click here for our free Consumer Reports Health guides to saving money on medication.)

•We're feeling more stress. The Consumer Reports Stress Index reached 63.5, close to its high point of 63.8 in April. An index score of below 50 means lower stress.

•We bought less in the last 30 days, and plan to buy less in the next 30 days. The Consumer Reports Retail Index shows purchases declined the most among small and large appliances. A bright spot was personal electronics--think smart phones–where 22.2 percent of consumers said they'd made purchases; however that was down from 27.1 percent the prior month. In the upcoming month, if the trend continues, consumers plan on buying fewer personal electronics.

•We lost more jobs than we gained. The Consumer Reports Employment Index was 48 percent, down from 49.9 in July. A score of 50 means job equilibrium.

Read more about the Consumer Reports Index, including how it was conducted, click here.