Despite Optimism, North American Discretionary Spending Falls Flat In Q2

By Pete Rizzo, Editor (@pete_rizzo_)

Global consumer confidence continued to increase during the second quarter of 2013, a newly released Nielsen report revealed. Improving financial conditions in the world’s largest economies – the U.S., Japan and China – drove this upswing.

But while the economic outlook in the United States is improving, a closer look at North America indicated that the United States’ neighboring consumers are more pessimistic about the economy.

The study’s U.S. consumer confidence index rose to 96 for the second quarter, up from the 93 mark observed during the previous three-month period. Conversely, Canada’s index fell by four points but remained strong at 98. Mexico’s Index dropped 5 points to 84. Overall, the global consumer confidence index rose one point to 94 in Q2.

Do these numbers indicate that North American consumers intend to spend?

In this PYMNTS.com Data Point, we’ll take a closer look at Nielsen’s spare cash usage data across eight major categories to illustrate how North American consumers have been using their spare cash over the last year.*

From the graph, it’s clear spending remains relatively flat across all discretionary spending categories. One reason for this, according to Nielsen, is that the economic recovery has not yet erased memories of the Great Recession.

The percentage of U.S. respondents who said they believed their country was in recession declined six points to 69 percent. This marked the lowest total observed by the study since before 2008. Still, nearly three-quarters did not have a favorable view of the economy.

Nielsen’s data does suggest consumer sentiment may continue to climb in coming quarters, provided key metrics continue to improve.

Over the last four quarters, the number of North American consumers who reported having no spare cash has declined.

Likewise, the number of North American consumers who report that they intended to save over this span has risen. Thirty-nine percent of North American consumers said they intended to save during the second quarter. This was up from the 35 percent that indicated this sentiment in the second quarter of 2012.

*Data from Q1 2013 and Q4 2012 includes U.S. and Canada only.

For more charts that put this data in a vivid display, download the full Nielsen report here.