A long-term cutback in spending? Most consumers say no
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A new Gallup Poll finds that about one-third of Americans say they believe that spending less will be their ‘new normal’ habit in the long run.
Thirty-two percent of 1,018 respondents in a July 10-12 phone poll said they have been spending less and plan to continue that way, Gallup found.
I’m surprised that the percentage isn’t higher -- if only because I’d expect people to either 1) give the more politically correct answer, which would be that they plan to rein-in consumption, or 2) take a more cautious view of the future even if their jobs seem secure at the moment.
From Frank Newport, editor-in-chief of the polling service:
These results are little changed from April, when Gallup first asked these questions. This suggests there has been no further deterioration in Americans’ projections of restrained future spending as the recession has worn on over the last two and a half months, but of course no major shift in the other direction, either. Clearly, there will be at least some negative repercussions on consumer spending going forward. But at the same time, two-thirds of Americans say they have not changed their spending habits, that their spending changes in recent months will not be permanent in the years ahead, or that they will actually be spending more.
Very few -- just 8% -- said that their ‘new normal’ would be spending more in the long run, however.
Of course, people who have no plans to spend less may have no choice if they lose their jobs, take a pay cut or have their credit reduced or cut off. Still, if two-thirds of poll respondents believe they won’t be reducing consumption on a long-term basis, are we underestimating the economy’s recovery potential?
-- Tom Petruno