The most negative view of the economic outlook in 15 years is leading more and more US consumers to change their spending and saving behavior, according to the latest survey from the Pew Research Center for People & the Press.
Americans continue to render extremely bleak assessments of economic conditions, both with respect to the national economy and their own financial situations, Pew says. “Fully 92% of the public rates the national economy as only fair or poor, and a substantial majority (61%) judges their personal finances that way. Both measures are among the most negative recorded in Pew Research Center surveys over the past 15 years.”
The public’s bearish economic outlook is spurring ever growing numbers of consumers to say they are cutting back on purchases or reconsidering their saving or retirement decisions, Pew says. “As a result of what’s been happening with the economy recently, 60% of Americans say they are changing the way their money is saved or invested, up from just 48% two months ago; 32% say they have adjusted their retirement plans. Substantial minorities also say they are either delaying or shelving plans to make major household purchases (45%) or buy a home or make major improvements (44%). And fully 73% say that they plan to cut back on holiday gifts this year.”
The survey suggests that the psychological impact of bad times, rather than an actual decline in people’s financial conditions, is the principal driver of these cutbacks and reconsiderations.
Nearly six-in-ten (59%) of those who say they are cutting back or delaying purchases report they are doing so because they worry things might get worse. Just 28% say they are cutting back because their financial situation has gotten worse.
Worry is the overwhelming factor in spending cutbacks being made by more affluent consumers: 72% of those with family incomes of $75,000 or more per year cite concerns about what might happen as a reason for their intended cutbacks. Among less affluent people the fear factor still predominates, but many more people cite an actual worsening of their situation as a reason for cutbacks.