The assessment of current business conditions fell 16 percentage points from the Spring 2012 survey. The index for future business conditions fell 13 points, and the index for change in the stock market dropped 15 points. These indexes have been lower in the fall survey than in the spring survey during both 2011 and 2012.
These results are consistent with the September general Consumer Confidence Index (70.3), reported by The Conference Board, and similar measures of consumer mood tracked by others. The expected change in after tax personal income was essentially unchanged. Over a third expect their net worth to be higher in September 2013. Those with the most optimism about future economic conditions are the under age 50, higher income, lower net worth, and male groups.
Spending plans for the 8 major items and the indexes for the change in spending for the 17 products and services tracked by these surveys are a little below levels in the Spring 2012 survey in most cases. A substantial amount of additional potential purchases of the 8 major items are represented by the consumers that have yet to decide about a new auto, a cruise, a remodeling project, and the acquisition of a primary or vacation home. Of the 17 product categories, only one (domestic vacation travel) remained in positive territory, five are in the neutral range, and 11 are in negative territory, suggesting a decline in spending.
Expectations regarding future income and net worth influence and/or correlate with spending plans. For example, the average index for changes in spending plans is 27 percentage points higher for those expecting an increase or no change in their income versus those expecting a decline in income. The difference is 26 points based on net worth expectations. There are pockets of particular strength in the spending plans, especially among the wealthiest one percentile.
Those who say they have not and will not make an effort to reduce expenditures have an average age of 58.9 years, income of $325,000, and net worth of $3.6 million. This group tends to be about 3 years older and have a 16% higher average income and 29% higher average net worth than those planning to reduce or defer expenditures.
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