Consumers Not Buying... Um, Anything

Worried Americans scaling back spending, saving more—bad news for retailers

By Jim O'Neill, Newser User

Posted Nov 12, 2008 10:16 AM CST

(Newser) – The US consumer has “gone from being the world economy’s greatest strength to its Achilles’ heel,” writes David Leonhardt in the New York Times. Just as Wall Street’s turmoil begins to calm, consumer spending—an economic mainstay—has gone into hiding, helping to accelerate General Motors’ tailspin and sending messages to retailers like newly bankrupt Circuit City that times are changing.

Americans have been spending some 99% of their income in recent years, but experts are guessing savings rates could rise to 3% next year as worried consumers pull back from their spending spree. That’s a good thing for individuals, but that 1% drop in spending could cost the economy some $400 billion in revenues it sorely needs.

Unsold 2008 4Runners sit at a Toyota dealership in the Denver suburb of Lakewood, Colo. (AP Photo)

Target says weaker consumer spending caused its October same-store sales results to fall 4.8%. (AP Photo)

Shoppers walk past displays of produce at the Whole Foods in Cambridge, Mass. (AP Photo)

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Consumers Not Buying... Um, Anything

Worried Americans scaling back spending, saving more—bad news for retailers

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General Motors • consumer spending • savings • Circuit City • financial crisis

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More Newser Stories

Consumer Spending Rises in Jan.

But experts don't expect boost to last

US GDP Jump Hollow if Unemployment Keeps Rising

... and it's still rising faster than before recession

Oldsters Refusing to Step Aside to Free Up Jobs

Reliance on volatile 401(k)s breeds reluctance to retire

Lousy Retail Sales Will Delay Recovery

Recession isn't over as far as consumers are concerned

Stimulus Boosts Americans' Incomes

Consumers tuck funds away: Savings rate hits 16-year high

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Consumers Not Buying... Um, Anything

Worried Americans scaling back spending, saving more—bad news for retailers

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OTHER STORIES ON OUR RADAR

General Motors • consumer spending • savings • Circuit City • financial crisis

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

More Newser Stories

Consumer Spending Rises in Jan.

But experts don't expect boost to last

US GDP Jump Hollow if Unemployment Keeps Rising

... and it's still rising faster than before recession

Oldsters Refusing to Step Aside to Free Up Jobs

Reliance on volatile 401(k)s breeds reluctance to retire

Lousy Retail Sales Will Delay Recovery

Recession isn't over as far as consumers are concerned

Stimulus Boosts Americans' Incomes

Consumers tuck funds away: Savings rate hits 16-year high

About Us

Site

Newser By Users

Community

Site Maps

Tools

More News

What is Newser?