Some interesting observations from a new Gallup poll published on Jan 21. If you are in the "New Normal" camp, you might want to take a closer look at some of these findings.. From Gallup:
Consumer psychology continues to feel the aftershocks of the financial crisis, as the "new normal" still dominates self-reported spending behaviors. While it is encouraging that 48% of Americans say they are feeling better about their financial situations and 56% say they are feeling pretty good about the amount of money they have to spend, their behavior seems to reflect something different -- a new normal. Seven in 10 consumers (70%) say they are cutting back on how much money they spend each week and 22% say they worried yesterday that they spent too much money.It's intruiging to see a bit of a disconnect between psychology and behavior. It could be that consumers are getting over the "fear" of the crisis, and are begining to take stock of the economic outlook. The youngest age group, ages 18 to 29, and the oldest age group, ages 65+ have the best outlook about their finances. Not surprisingly, so do the highest income brackets, those making $90K. Conversly, those with the lowest income and the generation that is begining to peak in their income generating age, are the least happy about their financial outlook. This brings up an interesting question? Who is the main driver of consumer spending, retirees and the youth? Or those aged 30 to 64? The middle class drives spending in the US, especially for retail. More from Gallup: New Normal Behaviors
The greater optimism among older Americans concerning their personal finances and the money they have to spend makes sense since they are generally not as dependent on the job market as are those in other age groups. Older Americans tend to have fewer financial commitments. They also tend to be more dependent on the performance of their investment portfolios, and these have improved dramatically since the March 2009 lows. At the other extreme, younger Americans generally tend to be more optimistic across a number of attitudinal measures. Like older Americans, they also tend to be less dependent on the job market -- many of them are students -- and tend to have fewer financial commitments. Of course, upper-income Americans have reason to be more optimistic as they have benefited from the sharp recovery of their investment portfolios since March 2009. The second half of 2009 was much better for these Americans than the prior year. It appears that older and younger Americans are more likely than other Americans to feel better about the money they have to spend. What is stunning about these results is the way even older and upper-income Americans continue to report cutting back on their spending and worrying about spending too much. These groups may be cutting back less, but continue to exhibit what may be thought of as "new normal" behaviors -- spending less than they might have otherwise in the aftermath of the financial crisis.XRT SPDR S&P Retail ETF is beginning to look like a good short candidate.