Consumer sentiment dropped again in August, and while currently about 35% above the all-time historic low reached in June of 2022, sentiment remains well shy of the historical average reading of 86. Inflation concerns continue to dampen consumer expectations but resilient shoppers are still spending - food services and dining were up 8.5%, and TSA checkpoint numbers show air travel is 13% above 2022.
Americans are looking for extra cash, driving household debt to record levels; 401(k) hardship withdrawals have increased as consumers try to deal with emergencies, debt, and immediate needs. Lacking better options, consumers seem more willing to prioritize present challenges over future retirement needs. What impact will retailers see when it comes time for shoppers to spend on holiday gifts as they look to trade down for more value?
© Copyright 2023. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.