First the good news: The way Americans feel about their own finances and the US economy is nowhere near as dismal as it was during the 2008–12 recession. The bad news is that, while things aren’t getting worse, they’re not getting much better either. Consumer morale, although stable, remains stubbornly low.
The slow start to the holiday shopping season underlines the findings of McKinsey’s latest Consumer Sentiment Survey. Every six to twelve months since August 2008, we have asked a representative sample of at least 1,000 Americans about their views on the economy and their own financial future, and how these opinions are shaping their buying decisions. The result is a unique data set that tracks how attitudes and behavior have changed over the past six years. In addition, we have completed nine surveys outside the United States, giving our data a global perspective.
There is no doubt that predicting the vitality and future growth of the American economy is a tricky science. Since the system is so heavily dependent on consumer spending, much depends on the level of confidence Americans have about their jobs, their cash flow, the value of discretionary spending, and the strength of the overall economy. We find, for instance, that because inflation-adjusted median household income has dropped over the past few years, consumers are feeling reluctant to increase spending and are instead remaining thrifty.