Economic woes cause spending cutbacks

[dkf]

Families across the country find themselves coping with spending cutbacks as the economy flirts with a second possible recession.

A new survey from Bankrate.com reveals that 40 percent of Americans say recent stock market volatility and economic uncertainty have caused them to button up their wallets and reduce expenses.


Bad news bears
It's not hard to see why. The summer delivered a succession of dour economic news that even the famously spendthrift American consumer couldn't ignore.

First, of course, there was political gridlock in Washington, D.C., over the debt ceiling, culminating in a U.S. credit downgrade by the rating agency Standard & Poor's. Then, we learned the economy inched along at an annual rate of just 1 percent in the second quarter of 2011, a much slower pace than had been previously believed. In August, hiring came to a standstill with zero net jobs added to the American economy.

And then there's the stock market. As July came to a close, the stock market became increasingly volatile. The Dow Jones Industrial Average lost about 15.8 percent through the first week of August. The index then recouped some of its losses, finishing the month down 4.3 percent, only to plummet again in the first weeks of September, unnerving investors.

http://www.bankrate.com/finance/consumer-index/economic-woes-cause-spending-cutbacks-1.aspx

[Cool Logic]

1. "...economic news that even the famously spendthrift American consumer couldn't ignore."

On the other hand, our famously spendthrift fedgov's spending habits continue to be unmitigated.

http://1.bp.blogspot.com/_2SW2_lbrxgY/S1eMsGDLzFI/AAAAAAAAAzA/_zmGJYqNYU4/s1600/Screen%2Bshot%2B2010-01-20%2Bat%2B%2BWednesday,%2BJanuary%2B20,%2B6.06%2BPM.png