Spending and economic growth may be tied to swearing-in
Last modified on Wednesday, 14 January 2009 06:41
According to a survey conducted by America’s Research Group on behalf of Reuters, nearly 70 percent of U.S. consumers plan to avoid non-essential purchases in the first quarter of 2009. However, they have expressed optimism toward the new President-elect, Barak Obama, and are anxiously awaiting his economic stimulus plan after his swearing in on January 20th.
Most indicated that they believe Obama’s plan will ease their fears over discretionary spending and that they will begin shopping again when they feel more confident about the economy. The survey results were released the week before the new President is sworn in.
According to the founder and CEO of America’s Research Group, Britt Beemer, most consumers reduce their discretionary spending after the holidays; but that percentage is closer to 55 percent on average. "I think it's job worries and not wanting to spend the money," Beemer said.
The U.S. Department of Labor released worrisome statistics last week: U.S. employers reduced their payrolls by 524,000 employees in December, driving the unemployment rate to its highest level in almost 16 years. Over 32 percent of those participating in the survey indicated that they fear losing their jobs, which has translated directly into reduced spending.
About 56 percent of the survey participants indicated that they expect Obama’s stimulus plan to help them economically and to help them feel motivated to part with their hard earned money. Obama has urged Congress to pass a massive stimulus plan, but has not released many details about his tax cuts and public works spending programs that may cost more than $800 billion.