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Consumers Clamp Restraints On ALL Spending

Posted September 29, 2009

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CONSUMER SPENDING: Consumer willingness to spend freely – without constraint – for clothing, food, gasoline, and medical services declines from an Index of 76 in August to 71 in September, which is within a point of the lowest level seen since the start of the Great Recession.

Active shopping for new cars, personal computers and other major goods in the form of checking prices and visiting dealers declines from an index of 100 in August to an Index of 97 in September.

Consumers pull back in willingness to spend for virtually all products tracked in the survey. Increases in willingness to spend are observed for only three of the fourteen products tracked: gasoline, carpeting and televisions.

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Christmas spending plans are curtailed. Specifically, the percent planning to spend less for Christmas this year than last moves up from 57% in August to 63% in September.

CONSUMER AFFLUENCE AND FINANCIAL PRESSURE

The harsh pull-back in spending plans is in step with declines in consumers’ feeling of affluence and of being under financial pressure.

Affluence

The index tracking consumer feeling of affluence ticks down from 58 in August to 57 in September – the lowest reading since the start of the Great Recession.

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Financial Pressure

The Index tracking consumer feeling of being under financial pressure jumps from 153 in August to 171 in September – the highest reading since the start of the Great Recession.

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Comment

Consumers are experiencing hard times. Government announcements that the recession is over do not incite consumers to spend.

In that 8Sages.com reports change in real time, its postings can appear to be anticipating or predicting change. This may be the case in this posting, as it reports on change in September before September has ended, while other indicators are reporting changes in June, July and August and will not report September activity until the close of the month.

Going forward, 8sages.com will post reports monthly. The October report will be posted on or shortly after October 21, 2009.

TO ASK QUESTIONS, make suggestions or offer your projections of the future, phone Leo J. Shapiro, CEO SAGE: Survival and Growth Enterprises LLC. He can be reached in Tucson at 520-878-0188.