Ipsos CASH Index: Is It 'Here We Go Again?' Or 'Up, Up and Away?'

Interviews for the latest polling were conducted between June 17 to 19 and July 8 to 10, 2003. The margin of error for the questions on each rolling average of two consecutive surveys totaling 2000 adults is 177 2.2%, nineteen times out of twenty. Washington, D.C. -- The Ipsos National CASH Index (measuring Consumer Attitudes and Spending by Household) fell slightly in early July, and now stands at 79.8.

View Larger Version A year ago, in early July 2002, the national CASH index stood at 82.9, down almost 20 points from Spring 2002, and poised to drop another 20 points to 61.4 in Spring 2003. Is July 2003 like July 2002 - a plateau predicting another sharp drop? One difference is that in July 2003, at 79.8, the CASH index is up almost 20 points from its low in March 2003. Some other differences:

• Decreased gap between expectations and current conditions: Back in July 2002, consumers were still experiencing defiant exuberance after 9/11, when there was a real reluctance to say anything negative about the U.S. or concede that the economy had slid into a recession. In July 2002, perceptions of the local economy were neutral, but expectations about the future were glum, resulting in a gap between current assessments and expectations that bred pessimism. Today, in July 2003, consumers are willing to express serious concerns about the current conditions of their local economy, while continuing to express doubts about the future. The gap between current assessments and expectations is therefore much narrower, with less of a sense of being at a precipice and about to fall off. Instead of defiant exuberance, consumers have been beaten down to a more realistic assessment of the current economy, while they are no more negative now about the future than they were a year ago. Does economic realism breed recovery?
• Increased comfort in making major purchases: Consumers are now significantly more comfortable making a major purchase like a home or car than they were a year ago. Does this bode well for recovery?
• High-income investors more confident than non-investors: Investors earning more than $50,000 per year are generally more confident about both current conditions and future expectations than non-investors. This is no doubt driven at least in part by the large stock market gains over the last quarter. High-income investors were the main group driving up overall comfort in making major purchases, while we observed no significant increase in comfort among non-investors. On the other hand, while non-investors became more concerned about the possibility of a future job loss, high-income investors became less concerned. High-income investors have emerged as a distinct group of consumers with attitudes different from the rest. Will they lead the way into recovery?

The following chart depicts the net change in the most recent monthly CASH Index rating since January 2002 based on each of the factors used to generate the Index. We have also added the components as they stood in July 2002 for comparison.

Ipsos CASH Index (Ipsos Consumer Attitudes and Spending by Household Index) Index Score Changes Since January 2002 - National Monthly -

View Larger Version The National CASH Index is constructed twice monthly throughout the year. In addition, Ipsos constructs regional and demographic CASH Indexes four times per year (at the end of each fiscal quarter), as well as preliminary indices (produced at the mid-point of each fiscal quarter). Ipsos CASH Index Surveys of consumers are conducted by Ipsos-Public Affairs, the Washington, D.C.-based division of Ipsos, which is the world's second largest polling and market research organization. The Ipsos Consumer Attitudes and Spending by Household (CASH) Index polls are conducted the first and third week of every month, as part of Ipsos-Public Affairs weekly omnibus polling service. The Ipsos CASH Index, started in January 2002, is a bimonthly national survey of consumer attitudes on the current and future state of the local economy, personal financial situation and spending, saving and confidence to invest.

For more information about the Ipsos CASH Index or to receive this report on the first and third week of every month, please e-mail [email protected], or contact Ursula Davis at 202-463-7300. For more information on this release, please contact: Thomas Riehle President, Ipsos-Public Affairs Washington, D.C. 202.463.7300