NEW YORK — Consumers held onto their purse strings in September, and it looks as if they may do so through October.
Retail Forward’s Index of Future Spending slipped to 100.7 in October from a reading of 102.7 in September, suggesting that spending at retail will let up somewhat during the month.
“The softer pace of sales expected this month is the result of moderating spending plans among middle and down market households, offsetting a further strengthening among those in the up market,” said Steve Spiwak, an economist with Retail Forward.
Wall Street analysts are expecting retailers who cater to upscale customers to fare well during the holiday season, while shoppers at the lower end of the income spectrum pull back on discretionary purchases as they feel a greater impact from rising home heating bills and higher prices at the gas pump.
Retail Forward said this month’s forecast survey challenged the widely held belief that more workers are upgrading their wardrobes, noting that job uncertainty continues to sap confidence, and subsequently, the willingness of consumers to spend.
The index reading for “up market households” rose to 101.2 in October from 99.3 in September. Up market households are defined as those with incomes greater than $75,000. Meanwhile, “middle market households,” those with incomes between $22,500 and $75,000, fell to 98.3 from 103.8 last month, “suggesting the pace of spending in this cohort should weaken this month.” For the “down market households,” the segment with incomes less than $22,500, the index declined for the second straight month to 106.3 from an upwardly revised 108.5 in September.