SPRINGFIELD, Mass. (WWLP) – The job market is still improving, but Americans are trimming their spending. A Bloomberg survey found that fewer people are spending money on houses, cars, and clothes.
The survey marks the first time spending has fallen in the past six months, and it was not an expected decline. Meanwhile, savings climbed to its highest level since 2012.
The survey blames low incomes, which barely budged for many workers this summer. An expert in business growth told 22News that consumers today are more cautious with their money after the Great Recession.
“I think people are still lacking confidence in the economy, even though all signs are that it’s getting better, and consumer spending drives the indicator,” Dianne Fuller Doherty of the Massachusetts Small Business Center said.
Spending accounts for some 70% of the economy, which means that if the consumer spending pattern doesn’t change, economic growth could decline.