American buying binge grinds to a halt

[jeffrey]

Just as one crisis of confidence may be ending, another may be coming.

The panic on Wall Street has eased in the last few weeks, and banks have become somewhat more willing to make loans. But in those same few weeks, American households appear to have fallen into their own defensive crouch.

Suddenly, the American consumer society is doing a lot less consuming. The numbers are pretty incredible. Sales of new vehicles have dropped 32 percent in the third quarter. Consumer spending appears likely to fall next year for the first time since 1980 and perhaps by the largest amount since 1942...

American buying binge grinds to a halt - International Herald Tribune

[disneysteve]

It's about time. I think this correlates with what happened with gas consumption earlier this year. People do what their pocketbooks dictate. When gas prices shot up, they finally started conserving, not out of some altruistic concern for the environment but because they simply couldn't afford to keep pumping money into their gas tanks. Now that unemployment is up, prices are up, wages are frozen, bonuses are cancelled, etc., people are backing off on spending and may actually start saving a few dollars for a rainy day.

[poundwise]

Originally Posted by disneysteve

It's about time.

Ditto. However, I expect that this attitude will fade away after things are less turbulent. You know how right after 9/11 everyone was more patriotic and perhaps even realigned their personal priorities? Yeah, that lasted what? A year?

Right now, people are pulling back, having learned some hard lessons and being made to face up to some harsh financial realities. This is causing people to be smarter with purchases and to sock away a little savings, however, there will come a time when the current 'crisis' will be forgotten and people will fill the car lots and malls, and won't think twice about taking out a new loan or maxing out the credit cards again.

Sad but, for many, likely true.

[CoreAssets]

Looks like we are going to have to think out of the box. The old one disintegrated.

[Broken Arrow]

Ditto what Poundwise said. But I for one would be glad to be wrong on this one.