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Do you feel confident in the economy? US consumers are looking to save and spend.

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Catching up with US consumers

In the news

•

Lowered expectations. Americans are postponing vacations and forgoing plans to buy appliances, cars, and houses as their views of the economy grow dimmer. In April 2023, US consumer confidence fell to the lowest point since July, according to an index from the Conference Board. Although more consumers reported that jobs were “plentiful” when compared with the previous month, many US households expect that conditions will decline further in the next six months. [Bloomberg]

•

Rainy-day fund. US consumer spending remained unchanged in March 2023 after ticking up 0.1% in February, the US Commerce Department stated in a recent report. Consumer outlays for healthcare, housing, and utilities contributed to a 0.4% increase in services expenditures. Spending on goods, however, dipped 0.6% lower, as sales of new cars slowed. Amid concerns over economic conditions, consumers are increasing their personal savings at a rate not seen since late 2021, government data showed. [Reuters]

Even as they look for ways to stretch their dollars, many consumers still plan to treat themselves: about 40% say they intend to splurge in 2023.

On McKinsey.com

•

Uncertain consumers. Across the US, consumers are unsure of what their finances will look like in the coming months and years. Although consumers are slightly more optimistic than they were in June 2022, about one in five survey respondents are expecting darker days ahead. Twenty-two percent of consumers are predicting a US recession and long-term economic pain, research by McKinsey partner Kari Alldredge and coauthors find. US consumers’ level of optimism is even lower than it was at the beginning of the pandemic .

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Spending and saving. Although a recession has not materialized, year-over-year spending growth remains relatively flat. Consumers are continuing to spend more, but they’re also being more cautious than they were earlier this year. Higher prices mean that most are looking for savings, with four out of five respondents saying that they’re now trading down—for example, by shopping at different stores to get the best deals. But consumers also want to spend big on food, fashion, and travel. Explore five charts on the state of US consumers.

See a snapshot of US consumers

— Edited by Belinda Yu, editor, Atlanta

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by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:20 - 4 May 2023

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Do you feel confident in the economy? US consumers are looking to save and spend.

Catching up with US consumers

In the news

Even as they look for ways to stretch their dollars, many consumers still plan to treat themselves: about 40% say they intend to splurge in 2023.

On McKinsey.com