Consumer confidence globally in the second quarter increased one index point to 97, marking the highest level since the first quarter of 2007, the latest Nielsen findings show. This forward momentum comes after a stagnant 2013, when confidence was stuck at 94 for three out of four quarters, the research company said.
Nielsen’s consumer confidence index measures perceptions of local job prospects, personal finances and immediate spending intentions. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism, respectively.
The problem is that different indexes look for different elements and that different consumers change their minds based on a wide range of factors. In short, Nielsen reports higher consumer happiness at the same time that NBC News and Wall Street Journal finds the opposite.
What Nielsen found, though, is positively upbeat.
Compared with the previous quarter, regionally North America (103) and Europe (77) reported consumer confidence increases of three and two points, respectively, Confidence was highest in the Asia-Pacific region, which held steady from the first quarter with a score of 106. Confidence declined in the Latin America (90) and Middle East/Africa regions (93), dropping three points and one point, respectively, Nielsen’s data show.
In the world’s biggest economies, consumer confidence increased six points in the U.S. (104), remained flat in China (111), declined eight points in Japan (73), declined three points in Germany (96), increased one point in France and increased three points in the U.K from the first quarter, Nielsen said.
“Buoyant increases across confidence metrics in North America and steady gains within parts of Europe strike a positive note with regard to economic recovery in mature markets," Venkatesh Bala, chief economist at The Cambridge Group, a part of Nielsen, said in reporting the findings. "The key to continued sustained economic expansion, however, will be further strengthening of the job market, which is vital for increased consumer spending.”
While Nielson’s consumer-confidence survey showed various positives globally, Byron Pollitt, Visa chief financial officer, noted during last week’s fiscal third quarter earnings call that he expects U.S. and international payment volume growth to remain healthy, but Visa has not yet seen acceleration in global economic growth.
“Cross-border transactions appear to be troughing in the 6 percent to 7 percent growth range on a constant dollar basis,” he said. “As perspective, we know that these growth rates can recover significantly without notice and that the notable declines in Latin American growth rates lap in January of 2015 and the market decline, related to the Russian-Ukraine crisis, will lap in March. Everything else equal, once these events anniversary, the pick up in cross-border growth could be in the 2 to 3 percentage point range.”