Consumers are struggling with high fuel prices and the rising cost of goods while incomes will likely remain unchanged. Only 10.1% think they will see a pay increase while the rest are planning to have less disposable income. Only 6.6% are not planning to make any changes to their spending habits.
In order to prepare for higher prices and stagnant incomes, 70.5% of Americans are planning to buy just the necessities. Driving less and spending less on clothing are also popular penny-pinching activities:
Preparing for Rising Food/Gas Prices If Salary Stays the Same
% of Respondents
Only buying necessities
Spending less on clothing
Sticking to a strict budget
Buying more store brand/generic products:
Spending less on groceries
Source: American Pulse Survey, June-2011
75.7% of Americans have little or no confidence that the government's economic policies will get the economy back on track, though 24.3% say they are confident or very confident. Confidence was at its lowest in March (21.5%), and has been steadily declining since June 2010 (31.2%).
While 68.6% of American consumers are somewhat/very worried that the U.S. government will slip into another recession this year, says the study, 11.8% are not very or not at all worried, and 19.6% are unsure.
The Federal Reserve has suggested printing money to help get the economy back on track, but among Americans:
44.2% of adults 18+ agree with John Boehner's policy that would match any increases to the debt ceiling with equal spending cuts:
In order to balance the budget, Americans are willing to make cuts to:
And, according to a new Gallup poll, the significant majority of Americans consistently report that they are cutting back on the amount they are spending each week. This may represent a "new normal" says the report, in which Americans are adjusting to a less robust economy, or a more basic element of human psychology that manifests itself in a need to present oneself as frugal.
Even higher-income Americans are less likely to say they are cutting back on spending than are those who have lower incomes. Still, almost half of those making $240,000 a year or more say they are cutting back.
Currently Cutting Back on Weekly Expenditures
% of Respondents
Source: Gallup Daily Tracking, 9/2010-May/2011