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Monday, September 13, 2010

Shifts in Consumer Demographics during the Great Recession

Attitudes and habits among American consumers are undergoing a change in the aftermath of the recession. Recent survey data from Nielsen group reveals that while the intensity of the economic panic had subsided since 2008, concerns persist and new habits in spending and saving are solidifying.

Consumer Confidence a Dynamic Phenomenon

One of the most striking findings of this Packaged Facts analysis is that “consumer confidence” is a highly fluid concept. From 2005 through 2009 there were tens millions of Americans who migrated in and out of the ranks of Confident and Anxious Consumers. At the end of this period, the demographic profile of Confident and Anxious Consumers had been dramatically transformed.

Multicultural Consumers More Confident

As noted in the February 2010 edition of Packaged Facts The African-American Market in the

U.S., African Americans were especially hard hit by the Great Recession. Yet, in the face of declining incomes and daunting unemployment rates, survey research from a variety of sources suggests that the sense of empowerment created by the election of Barack Obama has led blacks to adopt a more optimistic vision of the future than that held by other Americans. For example, data released in January 2010 by Washington, D.C.-based Pew Research Center survey found that the number of blacks who rate their personal finances as excellent or good was up from 2007 (32% vs. 27%). In sharp contrast, the ratings among whites dropped substantially, from 52% to 35%.

While non-Hispanic whites account for 69% of the population, they represent 80% of Anxious Consumers. In sharp contrast, 29% of blacks are counted as Confident Consumers, compared to only 19% of non-Hispanic whites. Non-Hispanic whites are three times as likely as blacks to be categorized as Anxious Consumers (23% vs. 8%). Latinos and Asians also are more likely than non-Hispanic whites to be Confident Consumers and are less likely to be Anxious Consumers.

The Confident Consumer represents the most attractive target for marketers eager to participate in a post-recession rebound. The average household income of Confident Consumers is significantly higher than that of Anxious Consumers ($82,928 vs. $64,279). The aggregate income of Confident Consumers totals $1.9 trillion, 27% higher than that of Anxious Consumers.


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