SCHAUMBURG, Ill. The majority (86 percent) of U.S. consumers believe the country is currently in a recession and more than half (54 percent) believe it will last longer than 12 months, according to a new online survey released last week by The Nielsen Company, conducted in the midst of economic turmoil last month.
“By the end of the second quarter, most U.S. consumers had already come to the conclusion the country was in recession,” said James Russo, vice president of marketing, The Nielsen Company. “As far as consumers are concerned, it doesn’t particularly matter that a growing number of economic indicators are pointing in that direction. They were feeling pain in their wallets and bank accounts long before October’s tumultuous stock market activity.”
Only 18 percent of those surveyed believed the recession will be over within a year. The least amount of confidence was expressed by 25- to 29-year olds, with just 6 percent saying the recession would end in the next 12 months. Similarly, only 7 percent of consumers age 65 and over expressed optimism that the recession would soon run its course.
“Younger consumers grew up in an era of prosperity and have never really known economic challenges to this extent,” Russo said. “To them perhaps, the current economic downturn is uncharted territory. There is a pervasive feeling of uncertainty, and concern which is clearly affecting spending levels. Older consumers are understandably concerned because of the potential impact of the economic downturn on their near-term financial needs.”
Of greater concern is the fact that more women than men feel the U.S. economy is in a recession, 91 percent versus 82 percent, especially as in many households women are the primary shoppers. When asked about the state of their own personal finances over the next 12 months, 39 percent of females responded “not so good” compared to 28 percent of males. Only 16 percent of women surveyed think their job prospects over the next 12 months will be good, compared to 26 percent of men.
The pessimism around the state of the economy has prompted many consumers to notch some new holes into their collective belts. Nielsen’s survey found that more than two-thirds of consumers are trying to save on gas and electricity, 56 percent are cutting back on out-of-home entertainment, spending less on new clothes (55 percent) or using their cars less often (54 percent).
Just 4 percent report taking no action at all.
And any increase in discretionary income may not provide an immediate lift to the economy, the survey found, because many of those consumers are taking any extra cash they may have and placing it into savings accounts (38 percent of consumers) or paying off old debts (36 percent).