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American Consumers Stop Spending: 'They All Feel Poor'
Unending bad news has sent consumer confidence reeling
By Jim O'Neill
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Posted Oct 6, 08 7:34 AM CDT
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(Newser)
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Consumers, hit by a tsunami of economic bad news, have dramatically cut back spending in recent weeks, on everything from clothes to cars to airline travel to dining out, reports the New York Times. The slowdown all but guarantees a drop in consumer spending for the third quarter, the first quarterly decline since 1991.“The last few days have devastated the American consumer,” says one analyst. “They all feel poor.”
Car dealers had their worst sales month in a decade and a half; retailers are reporting suddenly empty aisles and near-zero sales, and some—like Pier 1 Imports and Circuit City—have stopped giving earnings guidance for the rest of the year. Airlines, already reeling from rising fuel prices, are losing passengers faster than they can cut back on seats. Even "10-year-old girls are aware that something is going on,” says one clothing retailer. “Mom is saying, ‘I can’t afford that.’ ”