MURFREESBORO, Tenn. — Tennessee consumers’ improved outlook last fall about their financial prospects dropped noticeably over the winter heading into the spring, though higher income earners are a bit more optimistic than others, according to the latest statewide survey by Middle Tennessee State University.
With 63% of survey respondents worried about the economy, the Tennessee Consumer Outlook Index registered a score of -170, down from -140 last fall, reports the Office of Consumer Research in the Jennings A. Jones College of Business at MTSU.
The overall index and its three sub-indices (Current, Future and Purchasing) are based on consumers’ responses to 11 questions measuring their perceptions of the current economy, the future economy, jobs, personal finances, and whether now is a good time to make large purchases.
Overall, Tennessee consumers had become more optimistic last fall, however, positive sentiment decreased from 21% to 18% for the latest quarter, with positive sentiment remaining at 21% for those with higher incomes (above $70,000) and dropped to 16% for those with lower incomes (under $70,000).
“The Purchasing Index combined with low savings rates and high credit card balances project that consumer spending will likely remain low or decline further in the near future,” noted Michael Peasley, new director of MTSU Office of Consumer Research and an assistant professor of marketing.
“With wage increases lagging the increases in the cost of goods and services, consumer spending is occurring at the expense of their savings and through credit card debt, putting future spending at risk.”
Political approval ratings - Consumer ratings of political leaders' handling of the economy have remained relatively unchanged since the last survey, Peasley noted, with a high disapproval of President Joe Biden (48% strongly, 15% somewhat disapprove) and the U.S. Congress (30% strongly, 38% somewhat disapprove).
Meanwhile, Gov. Bill Lee (16% strongly, 17% somewhat disapprove) and the Tennessee General Assembly (16% strongly, 22% somewhat disapprove) both declined slightly this quarter, though the highest number of respondents are approving somewhat of their handling of the economy.
About the Consumer Outlook Index - The Tennessee Consumer Outlook Index scores are based on consumers’ responses to 11 questions measuring their perceptions of the current economy, the future economy, jobs, personal finances, and whether now is a good time to make large purchases.
The index, which includes three subindices, is computed by adding the percentage of favorable responses to each question and subtracting the percentage of negative responses to each question. The inaugural Tennessee Consumer Outlook Index came in at 15, a score that serves as a baseline for subsequent indices. The all-time low of -256 came in fall 2022 while the all-time high of 254 came in winter 2019.
To see the full report and previous reports, which also includes consumer perceptions of state and national political leaders, go to https://www.mtsu.edu/consumer/tnoutlookreports.php.
