Editors' pick: Originally published Nov. 1.
Retailers don't like to hear that average U.S. consumer is limiting his monthly spending, but it's great news for those consumers.
According to a Princeton Survey Research Associates International survey conducted for Bankrate in early October, nearly 2-in-3 Americans are limiting their monthly spending. That's good news, but it gets better: 30% are doing so to save more money. While 25% are doing so because of stagnant income, 15% are because of worries about the economy 10% are because they have too much debt and 3% are because they're worried about their job, that savings figure is the best news to come out of this survey since the recession.
"With pay raises now spreading out among the broad population, Americans are finally limiting spending for a good purpose - to save money," says Greg McBride, Bankrate's chief financial analyst. "This is the first time in four years that the top reason wasn't stagnant income."
That's not to say that saving is people's only concern. The University of Michigan's Consumer Sentiment Index hit its lowest point since 2014 in October, with more than half of consumers worried that an economic downturn is coming within the next five years. The Conference Board's Consumer Confidence also declined in October, though both noted that uncertainty brought on by the election wasn't helping.
"Objectively, the probability of a downturn during the next five years is far from zero - this would be the longest expansion in 150 years if it lasted just over half of the five year horizon," says Richard Curtin, chief economist for the University of Michigan's Surveys of Consumers. "Nonetheless, the October rise may simply reflect a temporary bout of uncertainty caused by the election."