Before October’s strong employment report, the economic narrative during last three months was marked by dampened job growth and choppiness in the stock market. While overall sentiment remains firm, a new survey revealed that one in five consumers said the recent developments made them less confident in their personal spending, according to the NRA’s Chief Economist Bruce Grindy. His Economist’s Notebook commentary and analysis appears regularly on Restaurant.org and Restaurant TrendMapper.
Job growth in October bounced back from lackluster results in August and September, according to preliminary figures from the Bureau of Labor Statistics (BLS). The October increase of 271,000 jobs was nearly as much as August (153,000) and September (137,000) combined, and represented the strongest monthly gain since December.
At the same time as the employment slowdown, the stock market fell into correction territory, with the S&P 500 Index dropping 11 percent over the course of a week in mid-August. While it regained some of the losses relatively soon after, the August – October timeframe still marked a period of uncertainty and choppiness in the markets.
The question is whether any of this spooked consumers, and had any real impact on their already cautious spending habits. According to a national survey* conducted October 22-25 by ORC International for the National Restaurant Association, one in five said it did.
Twenty percent of adults said the developments in the economy and stock market during the last few months made them less confident in their personal spending, while 3 percent said they made them more confident.
The impact was more noticeable among older adults, likely because they are more invested in the stock market. Twenty-nine percent of adults aged 55 or older said they are less confident in their personal spending as a result of these recent developments, compared to only 13 percent of adults between the ages of 18 and 34.
In the two weeks since the survey fielded, the stock market gained back all of the August losses, and in fact approached year-to-date highs this week. Although sentiment held firm for most consumers, the survey results suggest that there are some whose spending behavior remains sensitive to unexpected fluctuations in the economy and market.
*The survey results are based on a nationally-representative telephone survey of 1,009 adults conducted October 22-25, 2015 for the National Restaurant Association by ORC International.