Most Americans (53%) are worried about making their rent and mortgage payments, according to a poll released today by the Washington Post. The poll’s results are depressing but hardly surprising.
The almost daily headlines about the housing are so depressing that they would turn the biggest optimist almost suicidal. Foreclosures dipped slightly in the third quarter. But, this is because of freezes the banks have instituted as they review their documents that, it turns out, were faulty. Once those reviews are done, however, the rate will soar again.
The recently released Nielsen Global Consumer Confidence Index found that the optimism seen by the public earlier this year has faded. It estimates that one in four Americans have no discretionary income. Many people have learned about the perils of adding too much debt and are simply refusing to buy things that they can’t pay for in cash or in a short period.
Consumers are expected to channel their fears at the ballot box next week and drum out incumbent Democrats in droves, weakening President Obama’s ability to set economic policy in the process. Fears about the economy are the main topic of the political commercials that flood the nation’s airwaves.
“With a stubbornly weak labor market, consumers are concerned about the jobless recovery and managing their personal finances,” said James Russo, Vice President, Global Consumer Insights at The Nielsen Company, in a press release. “As a result, consumers are closely planning spending and they continue to reduce shopping trips while placing more emphasis on value. Fewer shopping trips are making every retail interaction critical for retailers.”
That also means that people will become ruthless in their pursuit of bargains, casting away brand loyalties that have taken companies years to build. At least, that;s the theory. The reality might not be as gloomy. This week, Procter & Gamble (NYSE: PG) reported better-than-expected results as did Royal Caribbean Cruises Ltd. (NYSE: RCL). People still want their Tide detergent and luxury cruise vacations, so it seems.
This could mean one of two things. Either rich people are less worried about the economy, or they are deluding themselves.
–Jonathan Berr
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