By: Shea Posey, Senior Account Executive, and Jake McKenzie, Chief Executive Officer
This week, people all over the U.S. celebrated Independence Day with traditional fanfare, like fireworks, parades, ice-cold beer, and grilling out. And although most enjoyed their day off work spending time with friends and loved ones, soaking up some sun, and eating good food, the realization that their 4th of July cook-out cost a lot more this year may have put a damper on all the merriment.
According to a University of Michigan survey released several weeks ago, consumer sentiment hit a record low in June. In fact, the final index reading of 50 in the monthly Survey of Consumers saw a 14.4% drop since May and represents the lowest recorded level since the university started collecting consumer sentiment data in 1952. Consumers in all demographics – income, age, education, geographic region, political affiliation, stockholding, homeowner status – all posted large declines.
The survey also revealed that inflation remains the biggest concern, with 47% of consumers blaming continued price spikes for negatively impacting their living standards. That’s just one percent below the all-time high reached during the Great Recession.
Overall, about 79% of consumers expect bad economic times in the year ahead. So, whether economists have deemed it “official” or not, consumers already feel like they’re in a recession, and their spending habits are reflecting that.
This report further emphasizes how the scarcity mindset impacts consumer behavior and, as discussed in our last CMO Minute, the importance for marketers to adjust their messaging to better reach consumers in an uncertain economy.
To discuss how we can help you with your marketing by turning psychological insights into great creative advertising, give us a call at 833-579-1905 or email us at firstname.lastname@example.org. And for a deeper dive into how much consumers have changed over the last two years and what marketers can do to adapt to those changes, check out our Psychology Behind the New Normal webinar!