In his latest commentary, the National Restaurant Association's Chief Economist Bruce Grindy overlays new consumer research with the latest jobs report. Although the employment situation showed renewed signs of life in recent months, consumers’ assessment of the economy remains bleak.
The employment report exceeded expectations in April, and upward revisions to February and March figures suggest the labor market is showing renewed signs of life. According to the Bureau of Labor Statistics, the nation’s private sector added a net 176,000 jobs in April on a seasonally-adjusted basis. (The overall economy added 165,000 jobs, as government payrolls declined by 11,000 in April.)
The April increase came on the heels of upwardly-revised gains of 319,000 in February (previously 254,000) and 154,000 in March (previously 95,000). February’s net gain of 319,000 jobs was second-strongest increase since the recovery began and only the third time that the private sector reached the 300,000 plateau in the last seven years.
Overall, with April representing the 38th consecutive month of job growth, the private sector has added nearly 6.8 million jobs since the employment recovery began in March 2010.
Although the economic recovery still has a long way to go, one would expect that these steady improvements would finally begin to influence the psyche of consumers. However, a new National Restaurant Association survey indicates that consumers’ assessment of the economy has remained essentially unchanged since the recovery began.
According to a survey of 1,000 adults conducted April 25-28 for the NRA by ORC International, only one out of 10 adults gave the national economy a rating of “excellent” (1 percent) or “good” (9 percent). Thirty-eight percent of adults describe the economy as “fair,” while more than half (52 percent) gave it a “poor” rating.
While these results on their own would not be surprising given the uncertain environment, the troubling fact is that consumers’ economic sentiment hasn’t budged in the last two and a half years. When the NRA fielded the same question in December 2010, December 2011 and October 2012, the results were almost identical: Only one out of 10 adults gave ratings of “excellent” or “good,” while a majority described the economy as “poor.”
Given this firm entrenchment, the economy will likely need to ramp up growth for a sustained period before consumers’ moods dramatically improve.
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Consumers’ Economic Sentiment Remains Bleak
Consumers’ Assessment of the National Economy
Source: National Restaurant Association, based on four surveys of 1,000 adults conducted by ORC International