The skanner., September 28, 2011, Page 20, Image 20

MBE 2011
how Will consumer confidence affect Year-end Spending?
By Charlene Crowell
NNPA Columnist
A
s September draws to a close, the
holiday season will soon be upon us.
It is also the traditional time when
consumer spending surges make the
annual difference between retailers
reaching profits or red ink. But
according to a recent consumer study
conducted by Princeton Survey
Research Associates on behalf of
BankRate.com, many consumers
have already begun tightening house-
hold budgets.
“Forty percent of Americans say
they have cut back on spending over
the past 60 days due to the roller-
coaster stock market or concerns about the
economy,” says Greg McBride, Bankrate’s
senior financial analyst. “This type of
widespread cutback in consumer spending,
if sustained for any length of time, is how
recessions are born.”
Beyond consumer spending, the study
also compared consumer comfort levels
today against those of 12 months ago in four
other measures: debt, savings, job security
and net worth.
If you’re feeling as if your total assets are
fewer than you’d prefer, there are many oth-
ers holding that same opinion. Across all
$75,000 or more were found more comfort-
able with their savings levels, they too are
spending less.
When consumers considered their person-
al debts, over half surveyed– 51 cent –
found they were about the same as last
year. This finding suggests that
while consumer may manage
debts, becoming debt-free for half
of Americans is long-term goal,
not a short one.
Job security was perhaps the
worst measure. More than half –
60 percent – job security is as elu-
sive now as it was last
year. Conversely, only 16 percent
felt their jobs were safer today.
David Denslow, Jr., a distin-
guished service professor in the Department
of Economics at the University of Florida
and a research economist for the Bureau of
Economic and Business Research offered
his interpretation on lingering job insecuri-
ty.
“This increased concern ranges from
dropouts to college graduates, from the less-
In the face of questionable job
security, lingering debts, meager
savings and lower net worth –
the usual merry tone of the
holidays may offer less cheer.
education levels, consumers said their net
worth is lower today than a year ago.
Older Americans ages 50-64 are feeling the
most financial stress. Half on this age
group are less comfortable today with their
savings than last year. They have also the
most likely to have already cut back on
spending. Although consumers earning
Page 12 • Minority Business Enterprise • the Portland and Seattle Skanner • September 29, 2010
New study finds
stagnant economy,
little job security affect
nearly all spending.
skilled
to higher earners, from the young to those
approaching retirement. And it is remark-
able for the beginning of the third year after
the official end of a recession. The third
years of the previous two recoveries saw
rapid job gains. This time may be differ-
ent.”
In the face of questionable job security,
lingering debts, meager savings and lower
net worth – the usual merry tone of the hol-
idays may offer less cheer. The economy
has taken the form of Ebenezer Scrooge.
Charlene Crowell is a communications
manager with the Center for Responsible
Lending.