Consumers still spooked, saving for 'inevitable unemployment'
By Jason Buckland, Sympatico / MSN Finance
Remember the scene in Conspiracy Theory when we first get a look at Mel Gibson’s apartment?
He had all those crazy telephoto lens pictures stapled up everywhere and kept that upside-down glass bottle on top of his doorknob so no one could break in undetected and you’re thinking to yourself, Man, this guy is seriously paranoid.
Well, call it what you want, but this still-broken economy – about a year into our Canadian recession – still has most of us spooked, too, according to a new survey from Bloomberg.
The study, based out of the University of Michigan, shows the U.S. consumer confidence index fell in July for the first time in five months as “mounting unemployment and stagnant wages shook households.”
The index, which gauges the consumers’ perception of their financial situations and whether it’d be a good time to buy big-ticket items like a new car, suggests the overwhelming majority of people don’t think things will be much better in the economy six months from now, either.
This fear of pending doom – the Consumerist suggests everyone is “scared to lose their jobs, still saving for their inevitable unemployment” – is still apparently causing a deadlock in healthy consumer spending which, as you might know, is a prominent key to jarring the world out of recession.
“The consumer isn’t going to be a leader in this recovery,” says Nigel Gault, a chief U.S. economist who accurately predicted the consumer confidence drop. “Any recovery in consumer spending will be very, very modest.”
Indeed, while it’s become apparent more people are shopping now at discount retailers like TJ Maxx (the U.S. version of Winners is one of the few stores posting gains in recent sales), the issue brings up an intriguing debate on the psyche of the North American consumer.
While paranoia is certainly not the word, it appears at least that conservative saving for your own affairs isn’t doing the world’s economy much good right now.
So, then, where do our financial obligations lie? Some are going to argue that we need to spend with some degree of normalcy to bring things back to ordinary, but it’s also tough to blast anyone for putting aside money in a rough time for their family’s long-term security.
But, which camp are you in?
Posted by: Joe James | Aug 5, 2021 7:49:21 AM
I quit contributing to my retirement account the past year so i could build up my bank account a little bit. Was it the right move? i dont know but i feel a little bit more secure. Another tip from http://www.chimpout.com/forum if you're interested
Posted by: Joseph Phillips | Aug 5, 2021 11:06:43 AM
Lets see. I've watched many good companies close or go Bankrupt. Not because of a cedit crunch but because of global trading. Global trading caused the meltdown. People did not stop making mortgage payments because of badly written mortgages but because they lost thier jobs to low cost countries. I myself am in process of helping wind down a company that has been around since 1974 and employed hundreds of hard working Canadians. Manufacturing is not dying because of the slowdown. They were leaving before and caused the slowdown. You are in for a real treat people in you believe when the automotive industry picks up Canada will. Most people lost thier jobs permanantly because the jobs are in mexico. Now that we've allowed the base of the economy to die who will the economists feed off of to make thier clueless ill informed predictions. Recovery sure but not in Canada anytime soon.
Posted by: Don | Aug 5, 2021 4:19:29 PM
Which camp am I in? My spending has not changed. I spend what I can afford and never let myself get so broke that any small emergency situation causes crisis. Nothing has really changed for me...other than I lost some on my investments.
As far as spending to help the economy, if a company's are not providing a product or service that I require I will not and never will spend money I dont have for the sake of spending money. This is what got so many into trouble in the first place. If I can buy it 20.00 cheaper at a discount store, I will. Nobody knows the difference after it comes out of the bag. My list of needs is very small. My list of wants, quite a bit larger. My needs are met. My wants...paid for by cash.
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will they be dealt with/removed any faster than, say...."chimp-butt" ?