Outlook among Tennessee consumers recovered slightly from an all-time low the previous quarter, but pessimism remains high this holiday season as inflation fears linger, according to the latest statewide survey by Middle Tennessee State University.
The Tennessee Consumer Outlook Index registered a score of -93 in December, up from an all-time low in September of –106 but still in negative territory, reports the Office of Consumer Research in the Jennings A. Jones College of Business at MTSU.
The slight improvement “was due almost entirely to improvements in consumers’ outlook for the economy’s future,” noted Tim Graeff, marketing professor and director of the Office of Consumer Research. “East Tennessee saw significant improvement in outlook, whereas overall outlook declined in West and Middle Tennessee.”
The current online survey of 627 Tennessee consumers was conducted between Nov. 29 and Dec. 10 and has an error margin of 4%. To see the full report and previous reports, go to https://www.mtsu.edu/consumer/tnoutlookreports.php.
“Although moderate, this improvement in outlook is good news for Tennessee businesses and retailers, especially those in East Tennessee, as we head into the ever-important Christmas shopping and spending season,” Graeff continued.
Online shopping still popular, but in-store uptick
Consumers expect to do more Christmas and holiday shopping in physical stores versus online this year. Although online shopping remains the primary means for shopping this year, less than half (39%) expect to do the majority of their holiday shopping online this year, compared to 53% last year.
“Consumers are becoming more comfortable shopping in retail stores and engaging in other consumer-related activities. However, consumers remain worried, frustrated, and afraid for the economy’s future, especially about the potential adverse effects of rising inflation and taxes.”
But given that two-thirds of the U.S. economy is from consumer spending, even slight increases in consumer optimism for the future can spur on future economic activity and growth, Graeff said.
“Overall, these results are good news for local businesses and retailers. Even though perceptions of the economy remain generally negative, consumers’ increased willingness, ability, and desire to resume normal activities, such as dining in restaurants and shopping in physical stores, is a positive sign for many retailers.”
About the Consumer Outlook Index
The Tennessee Consumer Outlook Index scores are based on consumers’ responses to 11 questions measuring their perceptions of the current economy, the future economy, jobs, personal finances, and whether now is a good time to make large purchases. The index, which includes three subindices, is computed by adding the percentage of favorable responses to each question and subtracting the percentage of negative responses to each question.