Study: Consumers can’t get satisfaction

3/24/2015

ANN ARBOR, Mich. — It probably takes less to satisfy the average consumer than it does to satisfy Mick Jagger, but even still, consumers can’t seem to get any satisfaction these days. According to new data from the American Customer Satisfaction Index, the national level of customer satisfaction dropped 0.5% to 75.2 in fourth quarter 2014.



This is the fourth consecutive quarterly decline in customer satisfaction for the country as a whole, forecasting weak economic growth for 2015. The last time the economy grew by 4% was in the late '90s, when consumer spending increased by more than 5% per year. But in 2014, consumer spending increased by just 2.5% and GDP grew by 2.3%. Given that consumers represent about 70% of GDP, the economy cannot expand much without greater consumer demand.   



The ACSI, which measures the quality of economic output from the perspective of the consumer, shows that it may be difficult for demand to grow. According to the ACSI, deteriorating customer satisfaction shifts the demand curve downward, reducing consumer spending growth.



With overall U.S. customer satisfaction steadily deteriorating, there is little incentive for customers to increase consumption. The ACSI says that weak consumer spending, low inflation, prolonged low interest rates, declining satisfaction and a global slowdown are rarely associated with economic growth.


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