No Matter What, Americans Keep On Spending

NEW YORK (MainStreet) — Median household is in decline, roughly matching income levels last seen in 1995, the U.S. Census Bureau Survey says.

But even though American consumers seem to be losing ground financially, their appetite for spending hasn’t really waned.

Is that good or band news for consumers and the economy?

First, the relevant data.

Another study, this one from New York-based GfK Custom Research shows that 61% of U.S. consumers have ‘experienced an economic setback in the past year.” Yet 71% of American consumers still plan a “big-ticket purchase” over the next 12 months.

The data paint a bleaker picture for the U.S., where 61% of consumers complained of a financials setback, compared with 51% for consumers across the globe. In fact, GfK says the U.S. ranks 20th out of 25 countries measured for overall consumer confidence.

Indonesia and India are at the top and Italy and Spain are at the bottom of the survey list, which surveyed 37,000 consumers in the U.S. and across the globe.

Yet only 65% of global consumers say they will make a big-ticket purchase in the next year, compared with 71% of Americans. The difference for U.S. consumers? They’re more willing to cut corners elsewhere to get a large purchase completed.

“Although caution is still pervasive in the U.S. – and other key regions – we do see signs of people being ready to move on,” says Kathy Sheehan, general manager of consumer trends at GfK. “Cutting corners is now a given of everyday life, but we also see that there is a desire to move forward with essential purchases and hang on to cherished luxuries such as technology and connectivity.”

U.S. consumers are in full coupon-clipping mode to cope with tough financial times and are most worried about losing their job in a recession. This from the study:

  • 96% of U.S. consumers reported using at least one money-saving strategy in the past year (versus 88% globally), and 55% said they had cut back in five or more key spending areas.
  • 85% of U.S. consumers say coupon clipping was by far their most-cited savings strategy.
  • 53% said that recession and job loss are the top personal finance worries these days.
  • 59% say dining out or going outside the home for entertainment (49%) were the most common budget cuts for U.S. adults.

The GfK survey doesn’t exactly define a “big-ticket” purchase. It could be as large as a new car or boat or as small as a new laptop computer or big-screen television.

Either way, Americans don’t seem to be holding back on major spending items, even as they’re kept reeling from personal financial setbacks. That says something about the great American consumer, whoare positive and even stubborn in the face of possibly the worst economy of their lifetimes.

Show Comments

Back to Top