Toby Smith

Are Consumers Ready to Spend Again?

by Toby Smith   01/21/09

The Bad

Consumers Are Still Hunkered Down

Among those U.S. consumers who said they're spending less, reduced income (up one point to 38%), saving more money (up two points to 41%) and reducing debt (up three points to 36%) were the top reasons given.

We note that during the past six months, the percentage of respondents who said they're spending less in order to save more money has skyrocketed from 18% to 41%, and the percentage saying they're reducing debt has jumped from 24% to 36%.

Sluggish Spending in Every Category

Spending is sluggish in every consumer category, but the results aren't quite as bad as seen in the previous survey when nearly all categories hit a record low. However, spending remains far worse than a year ago (January 2008).

It's worth noting that for the first time in a year, there are slight signs of improvement in restaurant spending, although the category remains very weak. Only 6% said they'll spend more going forward, while 48% said less -- a net two-point improvement since December.

Spending on household repairs/improvements has also registered an uptick from the all-time low seen in ChangeWave's December survey. Twenty-six percent said they'll spend more on household repairs during the next 90 days, while another 21% said less -- a net four points better than last month.