How The Recession Has Changed America's Spending

[bijou]

A new study by Pew Research entitled "How the Great Recession Has Changed Life in America"  does a great job of showing just how severe and widespread the damage has been.

It also does something of great interest to me by measuring lifestyle changes we have made in response to the recession. My view is that some of these behavioral modifications began prior to the recession for reasons that are based as much in new cultural and social norms as they are on economic imperatives--and that these will be long-term norms.

The biggest news out of the Pew study was that "more than half of the adults in U.S. labor force (55%) have experienced some work-related hardship--be it a spell of unemployment, a cut in pay, a reduction in hours or an involuntary move to part-time work. In addition, the bursting of the pre-recession housing and stock market bubbles has shrunk the wealth of the average American household by an estimated 20%, the deepest such decline in the post-World War II era, according to government data."

Other data points about economic optimism were similar to what we have found in our Zogby Interactive polls. Americans see the recession lingering, and many are doubtful their children will be better off than they have been. Like we have, Pew discovered that Democratic constituencies were more optimistic than those of Republicans, even though Democratic loyalists--African-Americans, Hispanics and young adults--have been hit hardest by job loss. As I've noted before, some of us are so polarized politically that it alters perceptions of personal realities.

The point made by the Pew research about changing consumer lifestyle is one I would expand on.

Pew reports: "Whether by choice or necessity, many Americans have already significantly scaled back their pre-recession borrow-and-spend habits. According to government data, household spending has gone down, savings rates have gone up, consumer credit has remained stable and mortgage debt has plunged during this recession." ...

http://www.forbes.com/2010/07/08/recession-spending-pew-opinions-columnists-john-zogby.html?boxes=opinionschannellatest