Table of Contents
Scope and Themes
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- What you need to know
- Data sources
- Consumer survey data
- Comperemedia
- Abbreviations and terms
- Abbreviations
- Terms
- Companies mentioned in this report
Executive Summary
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- Consumer spending and GDP growth
- The importance of consumer spending
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- Figure 1: Personal consumption expenditures, Jan. 1, 2000-Nov. 1, 2012
- Figure 2: Real PCE as a percentage of GDP, 1947-2012
- Household financial health and expectations
- High incomes don’t guarantee financial security
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- Figure 3: Current economic situation of household, by household income, December 2012
- Younger Boomers are struggling the most
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- Figure 4: Current economic situation of household, by age, December 2012
- Households are healthiest in the Northeast
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- Figure 5: Current economic situation of household, by region, December 2012
- More than half expect their incomes to remain steady
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- Figure 6: Expectations for household economic situation in next 12 months, December 2012
- Expectations for higher inflation and taxes
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- Figure 7: Expectations for U.S. economic situation in next 12 months, December 2012
- Blacks are the most optimistic
- Inflationary expectations are high, particularly for older groups
- Half believe home prices will remain steady, a third expect increases
- Financial goals and spending plans
- Consumers are still reluctant to spend
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- Figure 8: Intention to purchase a big-ticket item in next 30 days, 2007-12
- People are prioritizing short-term savings
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- Figure 9: Importance of financial goals in next 12 months, very and somewhat important, December 2012
- Even high-income households may lack an adequate financial cushion
- Goals for homeowners
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- Figure 10: Goals for homeowners over next two years, overall, December 2012
- Mass affluent somewhat more likely to spend on home improvements
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- Figure 11: Goals for homeowners over next two years, overall and mass affluent, December 2012
- Attitudes toward economic success and the “American Dream”
- Education and hard work are key to success, but so is good credit
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- Figure 12: Most important factors in achieving economic success, strongly and somewhat agree, December 2012
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- Figure 13: Attitudes about economic situation in the U.S, any agree, December 2012
- Gender and the American Dream
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- Figure 14: Most important factors in achieving economic success, any agree by gender, December 2012
- Figure 15: Attitudes about economic situation in the U.S, any agree by gender, December 2012
- Democrats much more optimistic about the economy
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- Figure 16: Expectations for increases in economic variables in next 12 months, by political affiliation, December 2012
- What we think
Issues in the Market
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- Are there indications that consumers will spend more in the future?
- Which groups are struggling the most in the current economy?
- How optimistic are homeowners about real estate prices?
Insights and Opportunities
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- Key points
- Mass affluents are focused on saving, not spending
- Women have different expectations than men
- Consumers see good credit as a major factor in economic success
- Blacks/African-Americans are extremely optimistic
- Lack of emergency savings conflicts with retirement savings goals
- Political affiliation is an important variable in consumer sentiment
- Americans could use a little faith in the economic future of their country
- Advertising is reflecting the new consumer mindset
Trend Applications
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- Trend: Prepare for the Worst
- Trend: Totophobia
- Mintel Futures: Old Gold
Current Economic Environment
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- Key points
- GDP above pre-recessionary levels
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- Figure 17: Real Gross Domestic Product, billions of chained 2005 dollars, Jan. 1, 1980-Oct. 1, 2012
- Consumer spending and GDP growth
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- Figure 18: Personal consumption expenditures, Jan. 1, 2000-Dec. 1, 2012
- Figure 19: Real PCE as a percentage of GDP, 1947-2012
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- Figure 20: PCE as a percentage of GDP in U.S. vs. Canada, 1961-2010
- The U.S. consumer and the global economy
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- Figure 21: U.S. GDP as a percentage of World GDP/PPP, 2002-12
- Other components of GDP
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- Figure 22: Real imports of goods and services, Jan. 1, 1980-Oct. 1, 2012
- Figure 23: Real net exports of goods and services, Jan. 1, 1995-Oct. 1, 2012
- Consumer spending may have crowded out investment
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- Figure 24: Real private non-residential fixed investment, billions of chained 2005 dollars, Jan. 1, 1995-Oct. 1, 2012
- Figure 25: Real private residential fixed investment, billions of chained 2005 dollars, Jan. 1, 1995-Oct. 1, 2012
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- Figure 26: Real government expenditures, Jan. 1, 1995-Oct. 1, 2012
- The impact of a slower rate of growth in consumption
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- Figure 27: Real retail and foodservice sales, Jan. 1, 1992-Dec. 1, 2012
Indications for Future Consumer Spending
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- Key points
- Current trends
- Impact of the “Great Recession” on household net worth
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- Figure 28: Household net worth, 1980-Q3 2012
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- Figure 29: Household net worth as a percentage of DPI, 1965-Q3 2012
- Total real wages now at 2008 levels
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- Figure 30: Real personal income, Jan. 1, 2000-Dec. 1, 2012
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- Figure 31: Productivity per person, Jan. 1, 2000-Sept. 1, 2012
- Low interest rates and the wealth effect
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- Figure 32: 30-year fixed rate mortgage average, 1995-2013
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- Figure 33: Consumer credit outstanding, total, revolving and non-revolving, 1995-2012
- Household debt burden—positive indicators
- Disposable personal income has increased
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- Figure 34: Disposable Personal Income, Jan. 1, 2000-Dec. 1, 2012
- Household debt service ratios have fallen
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- Figure 35: U.S. debt service ratio, all households, Q1 1980-Q3 2012
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- Figure 36: U.S. financial obligations ratio, all households, Q1 1980–Q3 2012
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- Figure 37: U.S. financial obligations ratio, homeowners, Q11980-Q3 2012
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- Figure 38: Components of FOR, homeowners, 1980-Q2 2012
- Other indicators—consumer sentiment
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- Figure 39: University of Michigan Consumer Sentiment index, 1995-2012
- Savings rate reflects a focus on saving rather than spending
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- Figure 40: Personal savings rate, Jan. 1, 2000-Dec. 1, 2012
- Stabilization in the housing market
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- Figure 41: S&P Case Shiller 20-city home price index, Jan. 1, 2000-Nov. 1, 2012
- Inflation is steady
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- Figure 42: Annual rate of inflation, CPI—Consumer price index, 1990-2012
- Gasoline prices may cause concern
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- Figure 43: Average annual motor unleaded gasoline retail prices, U.S. city average, 1990-2012
- The supply side—credit availability
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- Figure 44: Survey of bank lending officers—net percentage of respondents reporting increased willingness to make consumer instalment loans, 1990-2012
Innovations and Innovators
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- Key points
- PFM tools give consumers a way to control spending/saving/debt
- Sites/apps that focus on building or monitoring credit
- Apps that “nudge” spending and saving behavior
- Prepaid cards as tools to manage spending
- Bank business model innovators
- Mobile banking innovators
Marketing Strategies
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- Key points
- Marketing and the American Dream
- Email advertisements
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- Figure 45: Regions Bank email ad, January 2013
- Figure 46: PNC Bank Virtual Wallet email ad, January 2013
- Online banner ads
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- Figure 47: American Express Bluebird prepaid card ad, December 2012
- Figure 48: Visa prepaid card online banner ad, April 2012
- Direct mail advertisements
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- Figure 49: Chase direct mail ad, November 2012
- Figure 50: Bank of America direct mail ad, December 2012
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- Figure 51: Wells Fargo direct mail ad, December 2012
- Figure 52: Discover direct mail ad, November 2012
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- Figure 53: Chase Freedom cash-back rewards print ad, May 2012
- Television ads
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- Figure 54: Ameriprise Financial TV ad, January 2013
- Figure 55: Ameriprise Financial TV ad version 2, January 2013
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- Figure 56: Bill My Parents Spend Smart card TV ad, August 2011
Consumer Sentiment and Macroeconomic Expectations
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- Key points
- A third are struggling, a third are well off
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- Figure 57: Current economic situation of household, overall, December 2012
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- Figure 58: Current economic situation of household, by household income, December 2012
- Household economic situation since the Great Recession
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- Figure 59: Attitudes about household financial situation, 2007-12
- The economic recovery isn’t producing more optimism
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- Figure 60: Expectations about U.S. economic situation, 2007-12
- Many are still wary of making big-ticket purchases
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- Figure 61: Intention to purchase a big-ticket item in next 30 days, 2007-12
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- Figure 62: Intention to purchase a medium-ticket item in next 30 days, 2007-12
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- Figure 63: Expectations for spending in next 30 days vs. last 30 days, 2007-12
- Debt could be holding back consumer spending
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- Figure 64: Household debt situation, by household income, December 2012
- Economic expectations for the next year
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- Figure 65: Expectations for household and U.S. economic situation in next 12 months, December 2012
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- Figure 66: Expectations for household situation in next 12 months, by household income, December 2012
- Higher earners expecting an increase in taxes
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- Figure 67: Expectations for U.S. economic situation in next 12 months, by household income, December 2012
Financial Goals for Consumers
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- Key points
- Good credit is a primary goal
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- Figure 68: Importance of financial goals in next 12 months, December 2012
- Even higher earners want to increase their emergency savings
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- Figure 69: Importance of financial goals in next 12 months, by household income, December 2012
The Economy and the “American Dream”
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- Key points
- What does the “American Dream” mean?
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- Figure 70: What the American Dream means—percentage who say the following are components of the American Dream, 2008 and 2012
- Good credit just as important as education and hard work in achieving the American Dream
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- Figure 71: Attitudes about the economy and the “American Dream,” December 2012
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- Figure 72: Attitudes about the economy and the “American Dream,” December 2012, by household income, December 2012
Gender and the Economic Outlook
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- Key points
- Men are more financially “healthy” than women
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- Figure 73: Current economic situation of household, by gender, December 2012
- Figure 74: Current economic situation of household, by gender and age, December 2012
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- Figure 75: Expectations for household economic situation in next 12 months, by gender and age, December 2012
- However, men are more pessimistic about economic growth
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- Figure 76: Expectations for U.S. economic situation in next 12 months, by gender and age, December 2012
- Women are focused on maintaining good credit
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- Figure 77: Importance of financial goals in next 12 months, by gender, December 2012
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- Figure 78: Importance of financial goals in next 12 months, by gender and age, December 2012
- Men more likely to see the U.S. as a “land of opportunity”
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- Figure 79: Attitudes about the economy and the “American Dream,” by gender, December 2012
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- Figure 80: Attitudes about the economy and the “American Dream,” by gender and age, December 2012
Age and the Economic Outlook
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- Key points
- Older Gen X and Younger Boomers still struggling
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- Figure 81: Current economic situation of household, by age, December 2012
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- Figure 82: Current economic situation of household, by generation, December 2012
- Older Millennials look forward to the future
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- Figure 83: Expectations for household economic situation in next 12 months, by age, December 2012
- Older respondents more likely to have inflationary expectations
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- Figure 84: Expectations for U.S. economic situation in next 12 months, by age, December 2012
- Belief in education and hard work increases with age, young focus on entrepreneurship
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- Figure 85: Attitudes about the economy and the “American Dream,” by age, December 2012
- Young homeowners planning to pay down mortgages
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- Figure 86: Importance of financial goals in next 12 months, by age, December 2012
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- Figure 87: Specific financial goals for next two or three years, by generation, October 2012
- Figure 88: Statements on household debt situation, by age, December 2012
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- Figure 89: Statements on household debt situation, by gender and age, December 2012
- Age and household structure
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- Figure 90: Current economic situation of household, by marital/relationship status, December 2012
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- Figure 91: Statements on household debt situation, by marital/relationship status, December 2012
Ethnicity and the Economic Outlook
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- Key points
- Four in 10 Black and Hispanic households are struggling
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- Figure 92: Current economic situation of household, by race/Hispanic origin, December 2012
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- Figure 93: Expectations for household economic situation in next 12 months, by race/Hispanic origin, December 2012
- Blacks optimistic about the economy
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- Figure 94: Expectations for U.S. economic situation in next 12 months, by race/Hispanic origin, December 2012
- Non-whites most focused on saving
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- Figure 95: Importance of financial goals in next 12 months, by race/Hispanic origin, December 2012
- Whites, Hispanics most likely to be carrying a balance on credit cards
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- Figure 96: Specifics about household financial situation, by race/Hispanic origin, December 2012
- Asians much more likely to see connections as important to economic success
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- Figure 97: Attitudes about the economy and the “American Dream,” by race/Hispanic origin, December 2012
Geographic Region and the Economic Outlook
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- Key points
- Households are healthiest in the Northeast
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- Figure 98: Current economic situation of household, by region, December 2012
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- Figure 99: Expectations for household economic situation in next 12 months, by region, December 2012
- Western region most optimistic about real estate prices
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- Figure 100: Expectations for U.S. economic situation in next 12 months, by region, December 2012
- Midwest region most leery about healthcare reforms
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- Figure 101: Attitudes about the economy and the “American Dream,” by region, December 2012
Homeowners and the Economic Outlook
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- Key points
- The housing market
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- Figure 102: New and existing home sales, 2007-Nov. 2012
- Homeowners most likely to view their financial situation as healthy
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- Figure 103: Current economic situation of household, by homeownership status, December 2012
- Figure 104: Expectations for household and U.S. economic situation in next 12 months, by homeownership status, December 2012
- Half believe that home prices will remain at current levels
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- Figure 105: Expectations for U.S. economic situation in next 12 months, by homeownership status, December 2012
- Two in 10 homeowners look to purchase a new home in next two years
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- Figure 106: Goals for homeowners over next two years, overall, December 2012
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- Figure 107: Goals for homeowners over next two years, by household income, December 2012
- Younger people hoping to upsize
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- Figure 108: Goals for homeowners over next two years, by age, December 2012
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- Figure 109: Goals for homeowners over next two years, by race/Hispanic origin, December 2012
- Figure 110: Goals for homeowners over next two years, by region, December 2012
- Mass affluents not more likely to move, pre-retirees twice as likely
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- Figure 111: Goals for homeowners over next two years, pre-retirees and mass affluent, December 2012
- Homeowners similar to renters in perceptions of the “American Dream”
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- Figure 112: Attitudes about the economy and the “American Dream,” by homeownership status, December 2012
- Homeowners less burdened with credit card debt
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- Figure 113: Importance of financial goals in next 12 months, by homeownership status, December 2012
- More than a third of homeowners are mass affluent
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- Figure 114: Statements household financial situation, by homeownership status, December 2012
Mass Affluents and the Economic Outlook
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- Key points
- Mass affluents have significantly healthier cash flow
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- Figure 115: Current economic situation of household, mass affluent, December 2012
- Not more optimistic about salary increases
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- Figure 116: Expectations for household economic situation in next 12 months, mass affluent, December 2012
- Some signs of concern over tax increases
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- Figure 117: Expectations for U.S. economic situation in next 12 months, mass affluent, December 2012
- More focused on retirement savings
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- Figure 118: Importance of financial goals in next 12 months, mass affluent, December 2012
- Mass affluents believe in American opportunities
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- Figure 119: Attitudes about the economy and the “American Dream,” mass affluent, December 2012
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- Figure 120: Statements on credit cards, household loans and retirement savings, mass affluent, December 2012
Pre-retirees and the Economic Outlook
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- Key points
- Only a third of pre-retirees expect their savings to increase this year
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- Figure 121: Current economic situation of household, pre-retirees, December 2012
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- Figure 122: Expectations for household economic situation in next 12 months, by retirement and savings, December 2012
- Focused on saving, but also on splurging
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- Figure 123: Importance of financial goals in next 12 months, by retirement and savings, December 2012
- Much more positive about the “American Dream”
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- Figure 124: Attitudes about the economy and the “American Dream,” pre-retirees, December 2012
Political Affiliation and the Economic Outlook
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- Key points
- Republican households somewhat better off
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- Figure 125: Current economic situation of household, by political affiliation, December 2012
- Figure 126: Expectations for household economic situation in next 12 months, by political affiliation, December 2012
- Democrats much more optimistic about the economy
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- Figure 127: Expectations for U.S. economic situation in next 12 months, by political affiliation, December 2012
- Democrats more focused on credit card debt
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- Figure 128: Importance of financial goals in next 12 months, by political affiliation, December 2012
- Republicans value hard work and business ownership, Democrats value education
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- Figure 129: Attitudes about the economy and the “American Dream,” by political affiliation, December 2012
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- Figure 130: Political affiliation, mass affluent, December 2012
- Figure 131: Political affiliation, by homeownership status, December 2012
Cluster Analysis
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- Cluster 1: Status Quo Spenders
- Demographics
- Characteristics of this cluster
- Cluster 2: Older Affluents
- Demographics
- Characteristics
- Opportunity
- Cluster 3: Diverse Dems
- Demographics
- Characteristics
- Opportunity
- Cluster characteristic tables
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- Figure 132: Target clusters, December 2012
- Figure 133: Goals for homeowners over next two years, by target clusters, December 2012
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- Figure 134: Current economic situation of household, by target clusters, December 2012
- Figure 135: Importance of financial goals in next 12 months, by target clusters, December 2012
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- Figure 136: Expectations for household economic situation in next 12 months, by target clusters, December 2012
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- Figure 137: Expectations for U.S. economic situation in next 12 months, by target clusters, December 2012
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- Figure 138: Attitudes about the economy and the “American Dream,” by target clusters, December 2012
- Figure 139: Loan delinquency and educational loan payments, by target clusters, December 2012
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- Figure 140: Credit card ownership and payment behavior, by target cluster, December 2012
- Figure 141: Pre-retirees and mass affluent, by target cluster, December 2012
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- Figure 142: Political affiliation, by target clusters, December 2012
- Cluster demographic tables
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- Figure 143: Target clusters, by demographics, December 2012
- Cluster methodology
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