By Paul Carton
April 27, 2009

ChangeWave's latest survey points to a slight uptick in U.S. consumer spending going forward - the clearest signs of an improvement among consumers in nearly two years.

Although the April survey results do not signal a definitive end to the recession, they indicate that the long period of decline in consumer spending may finally be reaching a turning point.

While 55% of U.S. respondents still say they'll spend less money over the next 90 days, that's a seven point improvement since March. Most importantly, 16% say they'll spend more money - three points better than previously and the biggest overall increase since May 2007.

Importantly, the spending outlook improved among all income categories, although lower income households (under $50,000 per year) remain by far the weakest group in terms of spending going forward.

The survey of 2,717 U.S. consumers, completed April 7, 2009, focused on spending patterns for the next 90 days.

An Improvement in Consumer Sentiment and Expectations

We also asked respondents about their impressions of the economy, and found consumer sentiment and expectations have improved considerably since our March survey.

Twenty percent think the overall direction of the U.S. economy is going to improve over the next 90 days - nearly triple the 7% in March. And while 40% still believe the economy will worsen, that's a 30-point decline to the lowest level since August 2008.

In a further sign of bolstered confidence, 32% now say they're More Confident in the U.S. stock market than they were 90 days ago - a 25-point jump from previously.

At the same time, the percentage saying they're Less Confident (23%) fell a whopping 44-points, suggesting that the recent rally - featuring the best four weeks in a row on Wall Street since 1933 - did have a significant impact on consumer perceptions.

But even as some consumers appear to be gingerly crawling out of their foxholes, more than half still say they'll spend less over the next 90 days than they did a year ago. And when we asked why, Reduced Income (up eight points to 50%) was the top reason given for less spending.

Where is Spending Improving? With the exception of auto sales - which are still stuck near their recent bottom - the spending uptick stretches across a handful of key categories, with Restaurant spending, Travel/Vacation, Consumer Electronics, and Household Repairs/Improvements the biggest beneficiaries.

In a related question, we asked respondents to tell us where they'll spend more each month once the economy improves.

Once again, Travel/Vacations (48%), Restaurants/ Everyday Entertainment (44%), and Household Repairs/Improvements (36%) are three of the top categories.

Retail Store Trends

In another encouraging sign for the economy, our latest results are generally positive for the bigger shopping retailers - with slight improvements seen in terms of spending growth. However, it's big discounter Wal-Mart (WMT) that appears best positioned to outperform going forward.

After a long slide that began last summer, Costco (COST) has stabilized itself and appears better positioned going forward.

We also picked up a big seven point surge for Amazon (AMZN) in consumer online shopping over the next 90 days and found momentum for their Kindle eReading Device. This is the 5th consecutive survey since December 2008 that Amazon has been one of the top momentum leaders in our monthly ChangeWave consumer spending survey.

In sum, our latest survey points to a slight uptick in U.S. consumer spending going forward - the clearest signs of an improvement among consumers in nearly two years. While these results do not signal a definitive end to the recession, they indicate that the long period of decline in consumer spending may finally be reaching a turning point.

Jean Crumrine co-wrote this article