Americans Trust Their Finances, Not the Economy
There's been a lot of talk about whether consumer spending is sustainable given that consumers are mired in the doldrums, but a new survey suggests it is.
Why? Consumers appear to think that their own financial houses are in order and they believe they are prepared to weather any economic troubles that may lie ahead, according to the survey from JPMorgan’s Chase Card Services.
In other words, it’s not me, economy, it’s you.
About 60 percent of those surveyed felt the economy will get worse. That negative mood has been reflected in other surveys, including the Conference Board’s consumer confidence report,released Tuesday. The index showed confidence has slipped to its lowest level since March 2009, fueled by growing pessimism about both current and future economic conditions.
But before you raise new questions about how long it will take before consumers — who are obviously worried about job security and their income — begin to rein in spending, consider this:
- In the Chase survey, 63 percent of respondents said they had changed their spending and borrowing habits as a result of the economy.
- 77 percent said they were at least somewhat financially prepared for a hypothetical large expense of $1,500.
- 66 percent said they feel at least mostly in control of their financial situation.
Whether these beliefs are justified or not remain a debate for another day, but the idea is that more consumers are taking steps to get their finances in order and they feel more comfortable about their financial security, and that may be enough to keep the consumer spending engine humming.
If consumers feel good about their own finances, they are better able to be resilient spenders. Perhaps this explains why many consumers say one thing about their money, but do another.
Chase conducted its survey of 1,016 adults between Aug. 16 and 26.