According to an article in the Star-Telegram, Americans are drastically cutting back on spending as the number of job losses and bankruptcies continue to rise. The Conference Board reported this week that its Consumer Confidence Index is now at 49.3 percent, a significant decline from the May level of 54.8 percent.
The article said:
"Job security - a key factor in shoppers' willingness and ability to spend - continued to plague consumers surveyed by the Conference Board. And the Labor Department, which reports June's job data Thursday, is expected to show unemployment climbed. "Consumers are making a more somber and accurate assessment of the economy and their own financial position," said Mark Vitner, senior economist at Wachovia. "Consumers may be thinking less bad is not good enough."
As Americans watch their neighbors, friends and family members suffer job losses, foreclosure and eventually file bankruptcy, many are taking a more cautious approach with their money. There is a pervasive fear that job losses could soon move out of the realm of "others" to the very personal realm of facing a job loss that may actually send them to foreclosure or bankruptcy. Unfortunately, it is only now that some households are financially preparing for a possible job loss. The saving rates has been atrociously low for years; but Americans are now showing a renewed interest in savings. Some experts have even reported that a record number of American households have opted to save their stimulus payments or use them to pay off bills instead of spending the money at the mall.