Commentary

Personal Spending Not Back Yet

The results of a new AdweekMedia/The Harris Poll show that 79% of American adults say they have made cuts over the past year in their personal spending due to the economy. 32% have made a lot of cuts while 47% have made some cuts. 21% of Americans have not made any cuts in their personal spending due to the economy.

American Consumers Cutting Personal Spending in Past Year (% of All US Adults)

 

Total

Age

Income

 

 

18-34

35-44

45-54

55+

Less than $35k

$35k- $49.9k

$50k- $74.9k

$75k+

Made Cuts (Net)

79%

76

81

86

76

82

89

78

79

   Made a lot of cuts

32

31

36

40

25

38

34

36

26

   Made some cuts

47

45

45

46

51

45

55

43

52

   Did not make any cuts

21

24

19

14

24

18

11

22

21

Source: The Harris Poll, July 2009

76% of those who have made spending cuts have still not increased their spending, but 24% of those who made spending cuts have increased their spending. 4% have increased spending to what it was, while 21% have increased their spending, but to less than what it was. Younger people aged 18-34 are slightly more likely to have increased their spending, as are those aged 45-54, and who have household incomes of $75,000 or more.

Recent Spending Trend (% Of All U.S. Adults Who Made Spending Cuts)

 

Total

Age

Income

 

 

18-34

35-44

45-54

55+

Less than $35k

$35k- $49.9k

$50k- $74.9k

$75k+

Increased Spending (Net)

24%

29

16

28

22

20

24

26

28

   Increased spending to what it was

4

8

1

1

2

2

1

2

6

   Increased spending, but still less than what it was

21

20

15

27

20

18

23

23

22

   No, have not increased spending yet

76

71

84

72

78

80

76

74

72

Source: The Harris Poll, July 2009

59% of Americans say they are more likely to buy a product if it is advertised as "Made in America". For over one-third of Americans (37%) citing something as "Made in America" in an ad will make them neither more nor less likely to buy it while just 3% say they are less likely to buy something advertised as "Made in America".

There is definitely an age difference in how this phrase spurs people's purchase intent, notes the report. Three-quarters of those aged 55 and older, two-thirds of those aged 45-54, and three in five of those aged 35-44 all say they are more likely to buy a product advertised as "Made in America".

Proclivity To Buy "Made in America" (% of All U.S. adults)

 

 

Age

 

Total

18-34

35-44

45-54

55+

More Likely To Buy It (Net)

59%

39

60

68

74

   Much more likely to buy it

28

15

23

31

43

   Somewhat more likely to buy it

31

25

36

36

31

   Neither more nor less likely to buy it

37

57

38

29

24

Less Likely To Buy It (Net)

3

4

3

4

2

   Somewhat less likely to buy it

2

3

2

2

-  

   Much less likely to buy it

2

1

1

2

2

Source: The Harris Poll, July 2009

While most economists are starting to say the economy is turning around or that the recession is coming to a close, consumers may not be of the same mind. One thing to watch is the way Americans start to spend money again, concludes the report.

For additional information, and to access the PDF file, please visit Harris Interactive here.

 

 

1 comment about "Personal Spending Not Back Yet".
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  1. Howie Goldfarb from Blue Star Strategic Marketing, August 31, 2009 at 9:31 a.m.

    Since 1999 the average worker's income shrank by 5% after inflation. Because of the property boom home owners felt richer (falsely) and used their equity to live above their incomes. Since 2004 the Economist Magazine had many articles about the over leveraging of US households and that eventually this will need to be fixed. So until the average debt load falls to manageable levels for people spending will be crimped.

    Also a shocking fact from Business Week: Only 20% of US jobs pay $60k or above. The other 80% average $33k. So if people can not borrow against their equity or be given risky credit by banks how are advertisers or brands going to grow? Expect at least 3-4 years of stagnant revenue and profit growth.

    And we still haven't received the bill from the $5 trillion in national debt that Bush/Cheney and the GOP congress ran up from 2000 through 2008!

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