After the stock market shocks of last year, consumers and investors were desperate to curb spending. Americans started hoarding money, foregoing what were once considered necessities.
However, as the stock market shows signs of recovery, people are investing again, and even buying things other than bare necessities, such as new cars and sporting goods.
Locally, the shopping malls are crowded and shoppers still have to circle the parking lot once or twice to find an empty space.
But mall-goers are shopping differently.
For instance, the number of retail transactions at Chapel Hills Mall has remained the same, but the dollar amount of transactions has decreased, said General Manager David Moss.
He said that shoppers are eschewing impulse items, waiting for sales and hunting for bargains – but they’re still out and about shopping, dining and getting manicures.
And, rather than flaunting what they’ve bought, shoppers take measures to appear prudent – some even request plain bags or totes, he said.
“Spending is part of our DNA,” said Liz Johnson, private client manager for Charles Schwab in Denver. “It’s what we’re good at in America.”
Consumers are the lifeblood of the economy – spending drives two-thirds of the nation’s economy.
But as the recession dragged on and on – currently at 19 months and counting – many Americans cut back on discretionary spending.
The psyche of consumers has shifted from wild consumerism to a focus on wants versus needs, and the personal savings rate reflects that, jumping from negative territory to 4 percent – a sign that Americans had the proverbial wake-up call.
And, with credit difficult to obtain, some people were forced to live within their means.
But pundits are divided as to how long the change will last. A year or two? Perhaps five?
“I think it will last at least a decade, or maybe a generation,” said Liz Davidson, CEO of Financial Finesse Inc.
“The change won’t be as extreme and enduring as after the Great Depression, but for most Americans, this recession is the worst thing we’ve experienced in a lifetime,” she said.
Visit this week’s CSBJ poll, and share how your spending habits have changed.