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Billionaire Warren Buffett said the economy has "fallen off a cliff" over the past six months and consumers have changed their habits in remarkable ways.
Buffett said Monday during a live appearance on CNBC that current economic turmoil has basically followed the worst-case scenario he envisioned.
"It's fallen off a cliff," Buffett said. "Not only has the economy slowed down a lot, but people have really changed their habits like I haven't seen."
Buffett said the changes are reflected in the results of Berkshire Hathaway, Inc.'s subsidiaries. He said Berkshire's jewelry companies have suffered, but more people have been willing to switch to Geico to save money on car insurance.
He predicted that unemployment will likely climb a lot higher before the recession is over, but he also reiterated his optimistic long-term view: "Everything will be all right. We do have the greatest economic machine that's ever been created."
Fear and confusion have been driving consumer and investor behavior in recent months, Buffett said.
Progressive Grocer will reveal its own annual report in its April edition, with insights from The Nielsen Company's experts Todd Hale, SVP, consumer & shopper insights, and James Russo, VP, marketing. Nielsen has identified several new trends making their presence felt in checkout lines across the country. Far from presaging all doom and gloom, however, these trends represent real opportunities for grocery retailers and consumer packaged goods manufacturers to engage customers, deliver value and reposition offerings to better align with and succeed in today's economic climate.