Lack of optimism when it comes to the U.S. economy is encouraging Americans to save more than they did a year ago, American Express (AXP) said in a report released Sept. 9. The downside, in economic terms, is that a lack of growth in consumer spending indicates the domestic recession may not end anytime soon.
Respondents were decidedly pessimistic. Almost half of those polled said the economy will deteriorate further before improving, compared to the 42% who said the same a year ago. They cited friends' and family members' job status, the local real estate market and vacancies within their local business district as negatives.
Such pessimism appears to have put many individuals into cash-hoarding mode. When asked how they'd spend $500 found on the street, consumers were 60% more likely to say they'd save the money than they were a year ago. Then, they said they were more apt to pay monthly bills.
A need to reduce debt, get by with lower income and better handle fear of a job loss were other reasons Americans are spending less, American Express said in its report, which cited a survey of more than 2,000 people.
Interestingly, the survey found that of those who are maintaining spending habits, people who characterize themselves as sports junkies were most likely to throw caution to the wind, followed by tech hounds, fashionistas and foodies.