The current state:
Vibecession is a term widely used to describe a period during which the economy is relatively good according to financial data, but the public is pessimistic about the current or future economic situation. With consumer spending accounting for two-thirds of the U.S. economy, how we feel about the current economic situation is often more influential on spending than the actual economic reality.
How we’re feeling right now:
According to this week’s Consumer Pulse, the vibe is pretty good: 58% of respondents say they are somewhat or very confident in their personal financial position going into 2024. However, consumers continue to be concerned about inflation and the threat of a recession, and they don’t feel like they’ve caught up to where they were pre-COVID.
• 62% believe inflation will spike again in the New Year.
• 51% are concerned about a recession.
• 47% feel their finances are in worse shape than before COVID.
Why it matters:
Home sales are a major driver of home improvement activity, and this week’s report shows that 37% of Gen Z (ages 21+) and 42% of Millennials would like to buy a new house in 2024. While conditions in the housing market have improved – mortgage rates have been declining, there’s an uptick in new home construction, and prices have been moderating – consumers will need to feel confident that now is the right time to buy. An end to vibecession could be the key to a rebound in the housing and home improvement sectors.
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To get additional insight into what this means for brands and retailers, read the entire study.
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