"New Normal" Psychology Dominates Consumer Behavior; Seven in 10 Americans report cutting back on how much they spend each week.

Byline: Dennis Jacobe, Chief Economist

Synopsis: The "new normal" continues to dominate consumer psychology, as 70% of Americans say they are cutting back on how much they spend each week and 22% worry that they spent too much yesterday. Older and upper-income Americans are less likely to report these "new normal" behaviors.

PRINCETON, NJ -- Consumer psychology continues to feel the aftershocks of the financial crisis, as the "new normal" still dominates self-reported spending behaviors. While it is encouraging that 48% of Americans say they are feeling better about their financial situations and 56% say they are feeling pretty good about the amount of money they have to spend, their behavior seems to reflect something different -- a new normal. Seven in 10 consumers (70%) say they are cutting back on how much money they spend each week and 22% say they worried yesterday that they spent too much money.

Consumer "new normal" behaviors have remained largely consistent since Gallup began monitoring these consumer spending perceptions and behaviors on a daily basis since June 2009. The December 2009 results reported here essentially reflect the aggregated monthly trends. The degree of consumers' optimism about their personal finances has remained about the same across age and income groups. At the same time, so have consumer "new normal" behaviors.

More Younger and Upper-Income Americans Are Feeling Better About Finances

On a positive note for the economy, 6 in 10 younger Americans (aged 18 to 29) say they are feeling better about their financial situations these days. Fifty percent of older Americans (aged 65+) also hold this view, as do 44% of those 30 to 49 and 50 to 64.

Not surprisingly given the financial crisis and the sharp recovery on Wall Street last year, upper-income Americans (those making $90,000 or more a year) are more optimistic than other Americans: 62% are feeling better about their financial situations. In sharp contrast, only 36% of lower-income consumers (those earning less than $24,000 a year) report feeling better financially in December. About half of middle-income consumers (which includes two groups -- those earning from $24,000 to less than $60,000, and those earning from $60,000 to less than $90,000) said they were feeling better about their financial situations last month.

More Older and Upper-Income Americans Feeling Pretty Good About Spending Money

In another good sign for the future economy, 66% of...

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