Affluent Likely to Keep Economy Humming Despite Cautious Outlook for Personal Spending

New survey finds wealthiest 10% of U.S. households signal reduced spending for holiday gifts and many product categories in 2007
New survey finds wealthiest 10% of U.S. households signal reduced spending for holiday gifts and many product categories in 2007

RISMEDIA, November 15, 2006?Several important changes in the 12-month economic outlook and spending plans of the wealthiest 10% of Americans are revealed in The Affluent Market Tracking Study #10, the latest report in a series of twice-yearly surveys by The American Affluence Research Center (AARC).

According to Federal Reserve Board research, the 11.2 million households represented by this survey have a minimum $800,000 net worth, an average $256,000 income, and account for about a third of the total US gross national product.

You can now reserve, for your exclusive use, data from this new survey of the affluent, who, according to the Fed’s latest research, have an average net worth of $3.1 million, account for almost 70% of the total net worth of all households, and earn almost 40% of all US household income.

This latest survey, the only one of its type, provides the following information on the affluent:

– Their 12-month outlook for business conditions, the stock market, and

their personal earnings and savings

– Their current investment objectives

– Their purchase plans for 8 major items during the next 12 months

– Their expected changes in spending for 17 products and services during

the next 12 months

Plus data from a series of special questions on holiday shopping plans for Christmas and Hanukah gifts:

– Gifts the affluent would like to receive this year

– Planned expenditures this year versus 2005 expenditures for holiday

gifts

– People who will be given gifts, the type of gifts, and at what cost

– When most holiday gift shopping will be completed

– The major retail sources for holiday gift purchases

All of the above data is available in categories defined by gender, age, income, and net worth.

The outlook of the affluent for future economic conditions has declined substantially since the Spring survey. The composite Affluent Consumer Expectations (ACE) Index for economic conditions 12 months from now, though still positive, dropped to 105 from 118 six months ago. Index values can range from 0 (negative) to 200 (positive), with an index of 100 being a neutral reading.

Their projected $31 billion in expenditures for Christmas and Hanukah holiday gifts is 1.0% below 2005 spending levels. This contrasts with a 5% increase projected in an early October survey of the total adult population for the National Retail Federation.

The affluent reported that the adults in their household spent, in total, an average of $2,740 on 2005 holiday gifts. Approximately three-quarters of the respondents expect to spend the same amount for holiday gifts this year as last year. The number who expect to spend “less” (17%) this year is more than double the number who expect to spend “more” (8%).

Overall, 45% reported no plans for major expenditures (new motor vehicle, home, boat, or major home remodeling) in the next 12 months. The AARC surveys also track spending plans for 17 categories of goods and services, including major appliances, home computers, furniture/furnishings, entertainment equipment, casual and upscale dining out, entertainment, recreation, domestic and international travel, designer and non-designer apparel, collectibles, fine jewelry, and political and charitable contributions.

Of the 17 future spending indexes, only five remain in positive territory, and four of these declined from the prior survey. Of the 12 categories with negative indexes, all declined (several by substantial amounts) from the Spring survey. The Future Spending Index average, at 90.1, is now at its lowest level since tracking began in Fall 2003.

Highlights of the national survey of 426 men and women in the wealthiest 10% of American households can be found on the AARC website, www.affluenceresearch.org. Contact Ron Kurtz at AARC (305-933-4887) for press copies of the complete 30 page report, including 29 tables.

AARC is a Miami based firm that provides marketing research and consulting services that focus on the lifestyles, attitudes, and purchasing behavior of the most affluent segments of the population.

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