Think that the economy is looking up? Well think again – according to a July survey of nearly 3,000 consumers, spending is drying up and businesses like Best Buy (NYSE: BBY) and Walmart (NYSE: WMT
) are looking at lean times ahead.
According to a ChangeWave Research survey, completed July 8, consumers have their worst view of the economy since March 2009 – the month that the Dow Jones and S&P stock market indexes set 12-year lows. The data also shows that the number of consumers looking to cut back spending in the coming months is greater than the number of consumers increasing spending, indicating things could get worse down the road.
This is not a welcome trend for investors. The consumer sentiment index unexpectedly plunged in July according to the latest Reuters/University of Michigan Survey, hitting the lowest mark in 11 months.
Here are the specifics: More than half of those surveyed by ChangeWave said the overall direction of the U.S. economy is going to worsen over the next 90 days, Only 12% think it will improve –the lowest level in 16 months.
Similarly, there is a breakdown in confidence among investors. A total of 71% say they’re less confident in the U.S. stock market than they were 90 days ago – 9-pts worse than previously. These are the worst levels recorded in nearly two years, topping the 67% who expressed a lack of confidence in the stock market when it was bottoming out in March 2009.
It should come as no surprise then that several retailers may be looking at lower sales in the coming weeks. For instance, ChangeWave asked the nearly 3,000 survey participants if they’re planning on shopping at retailer Best Buy (BBY) for their electronics in the next 90 days, and only a meager 34% said they plan to visit the big-box store. That’s down to the lowest level in 17 months. The story is also bad for Walmart with the survey showing a spending decline for the retail giant for the second consecutive month.
ChangeWave Research completed its survey July 8, polling 2,795 consumers.
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