This quarter is likely to be the first since 1991 in which American consumers cut back on their purchases. A Wall Street Journalsurvey of more than 50 economists found that they "expect a 0.1% contraction in consumer spending during the third quarter." Other forecasts expect a greater than 1 percent decline.
The last recession earlier this decade surprised economists when consumers continued to spend, even as the stock market declined, unemployment worsened, and wages were stagnant. Of course Americans were encouraged by politicians following the terrorist attacks of 9/11 to do their patriotic duty and hop on planes, visit shopping malls, and go to the movies. Though finanicial markets and wage growth slackened, consumers were able to tap into their homes to maintain the type of consumption the go-go '90s had provided.
It's over now–even for teens. Often viewed as recession-proof spenders, American teenagers are getting frugal. Adrienne Tennant, a senior analyst at Friedman, Billings, Ramsey, ...
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