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NEW YORK -- Thanks to soaring oil prices, accelerated mortgage payments, and other concerns, consumer confidence in the U.S. has dwindled to levels not seen since the post-Katrina hurricane days two years ago, according to the latest "How America Shops... Everyday Pulse" report from WSL Strategic Retail.
Only 11 percent of people surveyed by the New York-based consultancy said they believe the economy has improved in the past six months. That's a significant drop from 23 percent of respondents who answered positively a year ago, when gas prices were falling.
Just 40 percent of consumers surveyed this year said they think their finances will get better next year. That's probably because 79 percent think gas prices will rise even further than the record high we're seeing now; and 36 percent are worried about how they'll be able to afford heating their homes this winter, said WSL Strategic Retail.
Cutbacks in spending this holiday season are expected to occur across the board, with personal hair and skin care and OTC medicines somewhat cut-resistant, according to the report. Only 30 percent of respondents said they would be cutting back on groceries, compared to 51 percent who plan to cut down on eating out.
"New essentials," which will experience the least cuts in spending, are pet care, cable TV, and cell phones, according to the report.