Consumers Spending Less, Expectations Falling
Consumer spending in June has fallen as shoppers save more and pay down existing debt. According to a survey by ChangeWave, some 31% of respondents plan to spend less in the next 90 days, a jump of 5% since the…
The ChangeWave data notes other significant points:
- Low-income households continue to be the weakest spending group, but the largest drop in June was among households with incomes of $100,000-$150,000.
- Spending declined in many categories, including home improvement, durable goods, restaurants, electronics, and travel.
- More than half (55%) of all respondents say that the US economy will get worse in the next 90 days — a jump of 19% since May — and only 12% say the economy will get better.
- In the past three months, consumer expectations have plummeted by a net 55%.
- More than 60% of respondents are less confident in the US equity market.
The trend toward lower spending is a replay of last summer’s experience according to ChangeWave. Besides saving more and reducing debt, 40% of those surveyed said they are spending less because their incomes are lower.
Falling gasoline prices have reduced concerns about rising energy costs, with just 14% of those surveyed giving those costs as a reason for reduced spending. That’s about the only good news to take away from the June survey.
Paul Ausick
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
