Despite a strong stretch for the U.S. economy, MTSU’s most recent statewide survey of consumers indicates their economic outlook continues to weaken and is slightly worse than it was a year ago. The Tennessee Consumer Outlook Index dropped to 159.
The Office of Consumer Research in MTSU Jones College of Business reported that weakness continues a similar decline from June to September of this year.
“However, the overall mood of Tennessee consumers remains positive, albeit not as positive as it was earlier this year,” said Tim Graeff, marketing professor and director of the Office of Consumer Research.
Graeff noted that the general decline in outlook was consistent across the state with consumers in Middle and East Tennessee showing the largest decline in outlook. The full report and previous reports can be found here.
The current online survey of 630 Tennessee consumers was conducted Dec. 3-7 and has a margin of error of 4 percent.
A decline in consumer outlook is not the news businesses and retailers like hearing heading into December since many retailers rely heavily on December sales numbers, Graeff noted.
The majority (62 percent) of survey respondents expect to spend less than $500 on gifts this year
According to the survey, when buying Christmas and holiday gifts during the recent Thanksgiving weekend:
• most consumers did their shopping online (39 percent)
• or at big box retailers such as Walmart and Target (31 percent)
• and one-third of Tennessee did not do any shopping this Thanksgiving weekend.
Nevertheless, the fundamentals of the U.S. economy remain “strong and solid,” Graeff said.
“As such, it is possible these declines in outlook are merely a correction, as consumers find it hard to believe the economy can continue to grow and expand at its current pace, evidenced by recent volatility in the stock market,” he said
With that volatility top of mind, Graeff said “it is easy to see why consumers’ expectations for the stock market and their investments have faded” since the market saw “wild fluctuations” during the survey period of the first week in December.
From Nov. 30 to Dec. 6 the Dow Jones Industrial Average dropped a total of 878 points, or almost 3.5 percent, with some single day declines during this period reaching nearly 800 points.