in

US consumers are feeling gloomy about the economy. What’s their biggest concern?

On Point

TODAY’S NEWS. TOMORROW’S INSIGHTS.
A daily newsletter from McKinsey & Company

Edited by Belinda Yu
Editor, Atlanta

Catching up with US consumers

The news

•

Still spending. For all of their worrying about the economy, American consumers—though anxious—are still opening up their wallets. In June 2022, one index of consumer sentiment fell to its lowest point since 1952, implying that consumers today are more downbeat than they’ve been throughout the entire COVID-19 pandemic. But while US consumers report being very gloomy, major retailers aren’t seeing that pessimism reflected in their earnings, and some are even recording record sales. For now, low morale has not yet dented spending. [FT]

•

Stable sales. Despite rising prices, US consumers are continuing to tackle home improvement projects, update furnishings, and buy personal-care products—all categories that have seen increasing sales. Overall retail sales remained flat between June and July 2022, but one gauge of spending that leaves out gas and car sales increased 0.7% over the same period. One big-box store says that shoppers are still spending, but they’re feeling the pinch of inflation more and more. Some are coping by buying cheaper groceries such as beans instead of beef. [WSJ]

With the exception of Gen Z, higher-income consumers of all ages say that their spending will continue to grow whether or not they’re buying necessities or discretionary goods.

Our insights

•

Feeling glum. With inflation surging to record highs, US consumer confidence has in turn dipped to a new low, find McKinsey senior partner Kelsey Robinson and colleagues. According to our latest Consumer Pulse Survey, 30% of respondents are feeling downbeat about the economy, doubling the amount who were feeling glum throughout the entire COVID-19 pandemic. Americans are overwhelmingly concerned about inflation, and along with it, rising prices. Nearly two-thirds of survey respondents cited inflation as their top worry.

•

Strong savings. Consumer confidence is low overall, but there are still signs of hope. US consumers have twice as much saved in cash as they did before the pandemic. In addition, although real spending is slowing down, some categories and channels are still growing. Cosmetics, grocery stores, and pet supplies are all experiencing double-digit sales growth. Credit and debit sales at wholesale clubs and discount stores are also going strong. See four areas companies can focus on as they grapple with shifts in sentiment and spending.

Understand US consumers

Was this forwarded to you? Sign up here.

Or send us feedback — we’d love to hear from you.

Follow our thinking

This email contains information about McKinsey's research, insights, services, or events. By opening our emails or clicking on links, you agree to our use of cookies and web tracking technology. For more information on how we use and protect your information, please review our privacy policy.

You received this email because you subscribed to the On Point newsletter.

Manage subscriptions | Unsubscribe

by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:42 - 31 Aug 2022

Archives

in

info@learn.odoo.com

How to monetize your audience

Top 5 from the McKinsey Quarterly

US consumers are feeling gloomy about the economy. What’s their biggest concern?

Catching up with US consumers

The news

With the exception of Gen Z, higher-income consumers of all ages say that their spending will continue to grow whether or not they’re buying necessities or discretionary goods.

Our insights