As American consumers head into a new year, they are scaling back on spending and preparing for more layoffs.
“After requisite holiday shopping is completed, consumers will put the pinch on spending,” said BIGresearch, a consumer research company (www.bigresearch.com), in a video briefing. According to a BIGresearch December survey, sales will decline for most consumer products categories, including sporting goods and men’s and women’s clothing. Only seasonal categories and home furniture were expected to improve. Also, 25.6 percent of people surveyed said they only buy things on sale, which is five points higher than a year ago.
Other research organizations reported an expected downturn in spending. Richard Curtain, director of the Reuters/University of Michigan Surveys of Consumers, said in a statement, “Total consumer spending is expected to decline by about 1 percent during 2009, followed by an unusually slow recovery in 2010.”
As spending decreases, unemployment is expected to increase.
According to the Surveys of Consumers, seven in ten people expected the unemployment rate to rise in 2009. “Consumers anticipate a steeply rising unemployment rate, moving toward 8.5 percent by the end of 2009,” Curtain said in a statement.
BIGresearch reported that 66.4 percent of people surveyed in December expect to see more layoffs in the near future, which is a seven-point increase from November.
According to BIGresearch, in December, only one in five people surveyed were confident or very confident about the chances for a strong economy. That’s down two points from November, and down 17 points from last year. However, the Surveys of Consumers actually saw improvement in consumer confidence. Its Index of Consumer Sentiment was 60.1 in the December 2008 survey, up from 55.3 in November.