Consumer Confidence Is Strong Despite Omicron

Safety perceptions dropped, but shoppers feel relatively secure and plan to spend.

February 07, 2022

Customer Spending Money Via Credit Card

NEW YORK—The Omicron COVID-19 variant has not shaken consumer sentiment despite renewed safety concerns, as financial sentiment and discretionary spending remain steady, according to a recent Deloitte survey. This is unlike previous pandemic waves, says Deloitte.

U.S. consumers expect to spend an average of $4,800 per household over the coming month, with one-third (35%) of their budgets slated for more discretionary categories such as recreation and entertainment, restaurants, electronics and leisure travel. These spending intentions have remained virtually unchanged over the past several months.

The survey found that roughly 6 in 10 (59%) Americans remain optimistic that their financial situation will improve within the next three years, a figure that’s also remained steady since September 2021, and the percent of consumers concerned about their level of savings (50%) and credit card debt (40%), while roughly unchanged since September, still remains relatively high.

Deloitte says that inflation concerns may be starting to ease. For the first time since September, the percent of U.S. consumers who cite rising prices for everyday purchases such as groceries and clothing did not climb.

The survey did find that Omicron has weakened safety perceptions for most activities globally to their lowest levels in a year, and for activities such as attending school and returning to work, to their lowest levels measured since mid-2020. The percent of U.S. consumers who feel safe sending their children to school dropped from 40% in November to 33% in December. The percent of U.S. employed adults who cite being able to work from home increased slightly for the first time in four months, from 51% in November to 54% in December.

“While safety perceptions have again declined amid a rise in Omicron cases, consumer confidence remains unshaken,” said Anthony Waelter, vice chair, Deloitte LLP and U.S. consumer industry leader. “Overall discretionary spending intentions among U.S. consumers remain steady. People have seen this movie before. And I think this speaks to a growing resilience to the pandemic’s ongoing ebb and flow.”

A recent Conference Board survey found that employee engagement and mental health has declined significantly. The survey found that decreasing engagement levels affected more workers over the past eight months—especially women (26%), individual contributors (31%) and millennials (28%). Nearly a quarter (24%) of workers report decreased levels of engagement.

Fifty-four percent of women self-reported their mental health declined during the pandemic compared with 41% of men. Millennials and Gen X report a deterioration of their mental health more than baby boomers. Half of individual contributors said that they are experiencing a deterioration of their mental health compared with 38% of CEOs.

The pandemic has increased anxiety and tension for everyone, especially those on the front lines. NACS Magazine dove into this serious topic in “Mental Health in the Workplace” in the September 2021 issue.