While nobody should hold their breath here, the most recent Harris Poll on consumer spending plans found that things haven't changed much since May -- with a few notable exceptions.
Those who expect to buy a new house or condo are up from a puny 7% to a measly 10%. Those who expect to buy a boat or RV have doubled from 3% to 6% and now a whooping 10% expect to start a new business compared to 6% last May.
Since housing is the big ticket item that has been spinning its wheels in the economic mud, let's look at that. No matter how you entice buyers with the lowest interest rates in decades, they just aren't buying. Part of it is group think -- we need the reassurance that others are also buying homes now because we don't trust our personal judgment over that of collective wisdom. And an even larger part of it is the banks, who have made it nearly impossible to get a loan. Without impeccable credit and nothing short of a letter from your employer swearing on a stack of bibles that he intends to employ you for life, banks just won't part with the money. Some have convinced sellers to hold a mortgage for them, not a bad idea for the credit-worthy to try. It is pretty baffling that the record-low interest rates and home prices listed at up to 50% of what they were in 2005 haven't convinced buyers to sign on the dotted line. Baffling and a little confusing.
Tax incentives still favor home owners. Rent is money you never see again. If you plan to live in a home for the average of seven years, you are locking into a fixed monthly mortgage expense. Can you say that about the rent paid to your landlord?
Other interesting findings in this survey include: Just more than half of all adults expect to save or invest more money. Savings has come back in vogue. You're cool if you sock away $100 a week; you're a chump if you take out a car loan or run up credit card debt.
The number of people who plan on taking a vacation away from home that lasts more than a week in the next six months is down from 36% last May to 31%. While traveling stretches your mind and exposes you to experiences and cultures outside the little box you live in, folks are opting to sock away the money instead.
So what does it all mean? Harris Polls have found no evidence of a significant change in consumer spending patterns. and in the absence of increased spending, economic growth will be sluggish. Perhaps it's time to ask not what your country can do for you, but what you can do for your country. And the answer is: Go shopping.
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