As the holiday season concludes, retailers may have more to be excited about heading into 2017. U.S. shoppers are as optimistic about the economy and the purchasing environment than they’ve been since August 2001, according to one metric from global economic research association The Conference Board.
The Consumer Confidence Index, a metric measuring the degree of optimism on the state of the U.S. economy expressed through consumer savings and spending, hit 113.7 in December 2016, up from 109.4 in November.
The measure of consumer expectations for the next six months rose to 105.5, the highest since December 2003 (94.4). On a similar note, the share of Americans expecting better business conditions six months from now rose to 23.6%, the highest since February 2011, from 16.4%, the Index revealed.
“The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices which reached a 13-year high, was most pronounced among older consumers,”said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions, which declined, still suggests that economic growth continued through the final months of 2016. Looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized.”
The optimism certainly brings good news for retailers amid uncertainty with a presidential transition kicking off 2017, but Franco’s revelation that expectations that need to be met may hold a key toward how lucrative the year truly will be for brands.
This especially holds true given that consumers’ assessment of current conditions actually declined in December. Those saying business conditions are “good” decreased slightly from 29.7% to 29.2%, while those saying business conditions are “bad” increased from 15.2% to 17.3%.
With the six-month projections remaining positive and shoppers showing confidence despite the slight decline in present business conditions sentiment, retailers must continue adapting their offerings to build on the momentum from the holiday season.