ICYMI: Higher Gas Prices Zap Shreds of Confidence
If there was a glimmer of hope found in our first quarter Arkansas Consumer Confidence Report, our second quarter survey may have dashed it.
Rising gasoline prices and fear of higher costs on goods and services have consumers hunkered down.
In a survey of 554 Arkansans conducted on Thursday, June 9, only 17% said they planned to spend more money in the next 6 months, while 50.5% said they would spend less. Those numbers are in sharp contrast to our survey three months ago that showed 41% planned to spend more with 29% saying they’d spend less.
57% of those who planned to spend less said they were conserving money, while only 4% thought the costs of goods and services would be lower in the near future.
And, retail gasoline prices – which are averaging about $1 higher than a year ago – were largely to blame. 69% of respondents said that higher gas prices have impacted other areas of spending, while 21.5% said their spending habits were unchanged due to higher gas prices.
“It is clear that while confidence in many areas of the economy has been low since the late 2008-early 2009 recession, the prolonged drumbeat of higher gas and food prices in particular are taking a toll on consumers,” said Talk Business executive editor Roby Brock. “The tremendous reversal in expected consumer spending underscores this point. I’d note, however, that as quickly as it changed course from the first quarter, it could do so for the better with potential good economic news.”
The Q2 Arkansas Consumer Confidence Report also showed a number of other worrisome areas related to personal finances, the jobs outlook and state and national business conditions.
You can view the complete survey results at this link. Also, Delta Trust and Bank CEO French Hill, a former economic advisor in the President George H. W. Bush administration [and current AFP-Arkansas Chairman], offered significant insight on the latest results.