Americans Say They're Ready to Shop Again
BOSTON (
) -- The so-called newfound frugality in the U.S. may already be over.
Amid the first signs of an economic rebound, Americans are ready to do what they do best: go shopping. That's according to a new survey by credit-card company
American Express
(AXP) - Get Report
.
People are starting to spend again, albeit slowly, after the savings rate rose to a 15-year high during the longest economic contraction since the 1930s.
Abercrombie & Fitch
(ANF) - Get Report
,
Aeropostale
(ARO)
,
The Gap
(GPS) - Get Report
,
J. Crew
(JCG)
and
Nordstrom
(JWN) - Get Report
may benefit the most, as many of the 2,032 adult respondents in the survey said they plan to buy clothes. Also on their to-do list? Perform car maintenance and make an appointment at the hair salon.
American Express surveyed the general U.S. population as well as two sub-groups: the "affluent" and "young professionals." The company's Spending & Saving Tracker, the first in a monthly series of reports about consumers' views about the economy and attitudes about spending and saving, was completed in late August. Consumer spending accounts for more than two-thirds of the U.S. economy, which fell into a recession at the end of 2007. Federal Reserve Chairman Ben S. Bernanke has indicated the economy has started to grow again.
Young professionals were more optimistic about the economy and more likely to increase spending during the next 30 days (24% versus 14% of the affluent pool and 10% of the general population), the American Express survey showed. Asked what they would be buying, two-thirds said clothing and more than half said dining out and travel.
Among the general population, nearly half of those who expect to spend more said they plan to increase purchases of groceries and clothes (49% each). The affluent will lay out more on travel (56%), dining out (47%) and clothes (43%).
"We may now be at a point when many consumers have taken stock of their financial situation and have a better handle on what their spending and saving plans are in the current economy," says Pamela Codispoti, senior vice president and general manager of card-member services for American Express.
Respondents were asked to compare their priorities from today to a year ago. Car maintenance showed the most significant jump, up 37%. Forty-two percent cited it as a high priority today, compared with only 5% a year ago, suggesting people have put off spending they could do without.
The second-highest shift was related to personal grooming. Forty-six percent said a trip to the salon was a high priority, compared with 18%.
"
Consumers are making distinctions between what they want and what they need," Codispoti says. "They have hit the reset button."
Not all luxuries are part of the spending upswing. Among the general population, "top priority" expenses a year ago were vacations (25%) and dining out (24%). With the new survey, only 7% cited vacations, and dining was listed as a high priority for 8%.
When asked what they would do with $500 of found money, a third of consumers said they would apply it to monthly bills. As a subset, however, more young professionals than affluent respondents said they would use the loot to go shopping for non-essential items (16% versus 6%).
Asked about purchases over $500, young professionals once again showed the most willingness to spend. Only 15% of the general population said they plan to make a large purchase in the next 30 days. By contrast, 38% of young professionals not only said they would, but planned to spend more on those purchases ($2,460) than their affluent counterparts ($2,170).
Those surveyed indicated their spending habits may be influenced by others' hardships.
When asked what has been the most significant impact of the economic downturn, the majority of the general population (74%) cited "seeing family and friends affected by the recession." More people gave that reason than "losing their job" (30%), "losses in the stock market" (54%) and "losses in retirement or 401(k) savings" (56%).
-- Reported by Joe Mont in Boston.
