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- The headline Bain/Dynata Consumer Health Indexes (CHI) composite outlook score rose significantly in June to 98.6 – just 1 point under its average reading for the prior 12 months. This rebound was led by a recovery among upper-income earners, whose scores had dropped significantly since the announcement of tariffs.
- The upper-income outlook score jumped 10.5 points, the largest single-month gain on record. The increase brought this group’s outlook score to within one point of the prior-year average, reflecting the group’s improving expectations for the prospects of their main asset (their investment portfolios) as financial markets have recovered.
- The upper-income score for spending intent rose 3.8 points to 110, 10 points above the long-term neutral measure of 100. Further, the data for the four-month period of March-June (i.e., since the onset of tariffs) has told a story of spending resilience even as outlooks have worsened. While many commentators lamented that “soft data” (consumer confidence, sentiment indexes) seems to have been in conflict with “hard data” (US retail sales, credit card data) during this four-month period, our spending series has consistently forecast resilient spending and continues to project robust spending among these households over the next month.
- Upper-income earners’ more optimistic stance is confirmed by their intent-to-use-debt score, which increased 8.5 points, the largest one-month gain since mid 2022. We read this as a favorable signal because upper-income earners use debt strategically, taking on more when they expect good times ahead and reducing their exposure ahead of bad times.
- In contrast, the situation for lower-income earners is deteriorating. The lower-income outlook score fell 2.2 points, erasing all the positive gains made since the fall of 2024 and returning this series to the lows of its 15-month range. We view this development as a signal of possible deterioration in the labor market.
- The lower-income group’s intent to spend is steady for now, with a flat reading (98.6) vs last month. However, intent to save for this group remains low at 92.8 (down significantly compared to long-term neutral reading of 100). Intent to use debt remains at a high reading of 103.1 (relative to long-term neutral of 100), a negative signal as these earners turn to debt in emergencies. Taken together, our data suggests that, even as spending stays even, strain is emerging among lower-income earners.
- In total, we do not see signs of any pullback in demand in the near term. Upper-income earners, who represent a disproportionate share of spending, are gaining confidence and indicating they plan to increase spending. We caution that lower-income earners’ outlook is turning sour, but we don’t yet see signs that this declining outlook is translating into a spending pullback.
Bain and Dynata created the Consumer Health Indexes in 2017 to support business decision makers in their near- and midterm planning for their businesses. To achieve this, we have been asking questions that are within the expertise of the people taking our surveys. What are their personal spending plans? What are their saving plans? What is their use-of-debt plan? These are direct, easily understandable questions about survey respondents’ near-term expected behaviors. They require little interpretation, macroeconomic expertise, or filtering through the lens of the political or news cycle. Since 2017, our clients have been using our Consumer Health Indexes as a differentiated data point relative to existing confidence indicators.
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