Shutdown Tightens Americans’ Purse Strings [AUDIO]
Nearly three in four Americans admit they are holding back on spending according to a new Bankrate.com report.
In fact, 32 percent of respondents to the report cited stagnant income as the most frequent reason, 24 percent said they need to save more while 20 percent said they are worried about the economy. Consumers have been tightening the purse strings even more since the government shutdown.
"When we asked Americans what is it that is holding them back from spending more, the most common responses are their income hasn't changed, they need to save more money or they're worried about the economy," said Greg McBride, senior financial analyst at Bankrate.com. "The September jobs report showed that year over year, average hourly earnings are up a little over 2 percent and there are a lot of people who have seen their expenses go up a lot more than that so they just don't have a lot of extra buying power."
The report also found a huge drop in how people feel about job security on the heels of the government shutdown.
"We had actually seen consumers really turn the corner this year in terms of how they felt about their financial security. We went six consecutive months where consumers indicated that their financial security was improved over the year prior. Of course, we dipped back into negative territory in September and October and one of the key factors was the government shutdown as well as this looming debt ceiling fight. We've dodged that bullet for now, but we'll get to go through it all again in a few months. So, it does make you wonder if this cloud of uncertainty will continue to hang over how consumers feel about their financial security and the overall economy," said McBride.
- Every age and income bracket is feeling less comfortable with their savings right now compared to a year ago.
- Among 50 to 64-year-olds, those less comfortable with their savings outnumber those more comfortable by a three-to-one margin.
- Every age and income bracket reports higher net worth than one year ago, except households with income under $30,000.
- Americans under age 50 are more likely to say their overall financial situation is better now than one year ago, while those 50 and older typically say it is now worse