Consumers plan to continue decreasing dining out, taking vacations and making major purchases, still uncomfortable with their levels of debt and savings. Nearly half of those surveyed report either avoiding shopping all together or shopping only for those things that are absolutely needed. Jack Clements with Citi Personal Wealth Management says nearly three in four respondents say they've cut back on everyday expenses.
"And this is a surprising result, given that we are almost 15 months into the economic recovery. At this point in the economic cycle, you would expect people to become more comfortable with their finances, open up their pocketbooks and start to spend more. But despite the economic recovery, Americans are really gun-shy. They're looking to cut back on everyday expenses. They're reluctant to make major purchases. They don't want to go on vacation. And that's truly an astonishing result and it says something about Americans' renewed commitment to financial prudence."
Consumers are packing their lunch, carpooling, cutting down on gas and electricity use and growing their own food. Clements says the recent recession reminded people how precarious their financial lives can be.
"And despite the fact the economy's coming back, we're continuing to see people adopt those new financial attitudes. And it's really a good news/bad news story. The good news is people are rediscovering financial prudence and that means that we're more likely to see Americans retiring in comfort. The bad news is they've rediscovered financial prudence at a terrible time for the economy. In terms of the short-term economic recovery, what we really want is people (to) open up their pocketbooks and start to spend. That'll increase the amount on the economy and help employers to go out and hire people."
The survey indicates Americans are waiting for changes in national and local unemployment statistics as a signal that the downturn is ending.