WASHINGTON - Monique Blake won't be shopping for new clothes. William Acosta got rid of his cell phone. Paula Rockwell put off buying a home.
In ways both large and small, Americans are doing without. Squeezed by lofty prices for gasoline, food and other products, worried about their jobs and rattled by talk of a recession, people are hunkering down.
Each person's decision to give up something and trim spending can collectively carry crucial implications for the economy.
Personal spending accounts for the single-biggest chunk of gross domestic product, which measures national economic activity. Because of that, people's behavior is important in determining whether the country will survive the economic turmoil or fall victim to it.
Sixty percent of the public say they are now less comfortable about making a a big-ticket financial commitment, such as buying a home or a car, than they were just six months ago, underscoring their more circumspect behavior, according to the RBC Cash poll conducted by Ipsos, an international polling firm, in early April. A year ago, 48 percent said they were less comfortable about making a major purchase.
"I'm feeling more cautious about buying a house. We were thinking about that, but we'll be waiting a little bit longer than we otherwise would have," says Rockwell, 53, a homemaker in Baltimore, Md. She described the current economic climate as being fraught with insecurity. "A larger number of people are really hurting and even people fairly well off are feeling insecure," she says.
BIGresearch, a firm that tracks consumer behavior, said 53.6 percent of people they polled focused more on what they needed, rather than what they wanted, during their shopping trips over the last six months.
"It's more about cutting back rather than cutting out. Like taking your family to Pizza Hut versus Applebees," says Marshal Cohen, chief retail analyst at NPD Group, a consumer and retail research firm.
Clothing stores, furniture and home furnishing retailers, electronics and appliance stores, building materials and garden supply places, and health and beauty shops were among the merchants who saw their sales drop in March, according to a recent government report on retail sales around the country.
"I don't shop for clothes and other stuff. I just wear what I have," says Blake, 27, of Clanton, Ala.
Pam Goodfellow, a senior analyst at BIGresearch, says the frugality has put more of a focus on "smart shopping and bargain hunting. People are picking up fewer items to complement what they already have."
Shoppers are tightening the belt in the face of a number of negative forces.
Employment conditions are deteriorating. Job losses for the first three months of this year are nearing the staggering quarter-million mark and the unemployment rate has climbed to 5.1 percent, the highest since the aftermath of the devastating Gulf Coast hurricanes in 2005.
Rising prices for food, energy and other goods and services are taking a bite out of paychecks. Workers' average weekly earnings -- adjusted for inflation -- fell to $279.80 in March, a 1 percent drop from the same month last year. With gasoline prices, marching toward $4 a gallon, people are left with less money to spend on other things.
Meanwhile, those who own homes are watching what is often their single-biggest asset fall in value, making them feel less wealthy and less inclined to spend. And, harder-to-get credit has made it more difficult for people to finance pricey, big-ticket purchases.
The housing crisis and expensive gasoline prices are things shoppers can't control. So, they're taking power in other ways, "by controlling the little things ... filling up the cart and putting things back at the check out," says Candace Corlett, principal at consulting firm WSL Strategic Retail. "I'm going to put it back. They are learning restraint and that is deadly for commerce," she says.
As people tighten belts, so are many companies. Some are cutting back on production and many are reluctant to hire. High prices for energy and other raw materials are squeezing profit margins. The more cautious behavior by people and businesses is rippling through the economy and making for weaker activity.
Research by WSL Strategic Retail found that fashion accessories, home decor items, premium brands or food and specialty coffees, eating at restaurants and take-out foods, and tickets to entertainment, are the top areas where people are trimming their spending.
Starbucks Corp., the world's largest coffee retailer, warned Wednesday that its second-quarter earnings would be weaker than expected and lowered its earnings forecast for the year as the economy's slowdown hit sales, especially in California and Florida -- two markets hard hit by the housing market's collapse.
Far fewer people, meanwhile, are willing to cut back on things like medications, cell phone service and cable TV service, Corlett says. Cable TV and cell phones have become kind of like the "new essentials," Corlett says.
Don't tell that to Acosta, 38, of Jefferson County, Mo. He has given up his cell phone as he struggles to make ends meet while studying to become a nurse and working at a remodeling company. "I can barely afford my utility bills," he says.
With the high price of gas and groceries, Acosta says he no longer can afford little treats like going out to eat or taking in a movie.
Blake, who is not employed, says she and her husband, who is working, are cutting back on these things, too. They also don't plan to take a fancy vacation. "We don't have the money or the extra money," she says. And, she's considering cutting off their cell phone service or moving to a prepaid plan, to reduce expenses.
BIGresearch says 35.2 percent of people polled are scaling back vacation plans.
Even though Blake, Acosta and others say they are eating out less, the government's recent report showed that sales at bars and restaurants posted a modest increase in March from the previous month. Sales at sporting goods, hobby, book and music stores, meanwhile, showed a solid rise in sales.
Cohen's research says video games, toys and skin care products are three areas he believes are least likely to see spending cuts.
For now, there are some things that Blake and Rockwell don't want to give up: health-club memberships. "It's important to be healthy," Blake says.
In ways both large and small, Americans are doing without. Squeezed by lofty prices for gasoline, food and other products, worried about their jobs and rattled by talk of a recession, people are hunkering down.
Each person's decision to give up something and trim spending can collectively carry crucial implications for the economy.
Personal spending accounts for the single-biggest chunk of gross domestic product, which measures national economic activity. Because of that, people's behavior is important in determining whether the country will survive the economic turmoil or fall victim to it.
Sixty percent of the public say they are now less comfortable about making a a big-ticket financial commitment, such as buying a home or a car, than they were just six months ago, underscoring their more circumspect behavior, according to the RBC Cash poll conducted by Ipsos, an international polling firm, in early April. A year ago, 48 percent said they were less comfortable about making a major purchase.
"I'm feeling more cautious about buying a house. We were thinking about that, but we'll be waiting a little bit longer than we otherwise would have," says Rockwell, 53, a homemaker in Baltimore, Md. She described the current economic climate as being fraught with insecurity. "A larger number of people are really hurting and even people fairly well off are feeling insecure," she says.
BIGresearch, a firm that tracks consumer behavior, said 53.6 percent of people they polled focused more on what they needed, rather than what they wanted, during their shopping trips over the last six months.
"It's more about cutting back rather than cutting out. Like taking your family to Pizza Hut versus Applebees," says Marshal Cohen, chief retail analyst at NPD Group, a consumer and retail research firm.
Clothing stores, furniture and home furnishing retailers, electronics and appliance stores, building materials and garden supply places, and health and beauty shops were among the merchants who saw their sales drop in March, according to a recent government report on retail sales around the country.
"I don't shop for clothes and other stuff. I just wear what I have," says Blake, 27, of Clanton, Ala.
Pam Goodfellow, a senior analyst at BIGresearch, says the frugality has put more of a focus on "smart shopping and bargain hunting. People are picking up fewer items to complement what they already have."
Shoppers are tightening the belt in the face of a number of negative forces.
Employment conditions are deteriorating. Job losses for the first three months of this year are nearing the staggering quarter-million mark and the unemployment rate has climbed to 5.1 percent, the highest since the aftermath of the devastating Gulf Coast hurricanes in 2005.
Rising prices for food, energy and other goods and services are taking a bite out of paychecks. Workers' average weekly earnings -- adjusted for inflation -- fell to $279.80 in March, a 1 percent drop from the same month last year. With gasoline prices, marching toward $4 a gallon, people are left with less money to spend on other things.
Meanwhile, those who own homes are watching what is often their single-biggest asset fall in value, making them feel less wealthy and less inclined to spend. And, harder-to-get credit has made it more difficult for people to finance pricey, big-ticket purchases.
The housing crisis and expensive gasoline prices are things shoppers can't control. So, they're taking power in other ways, "by controlling the little things ... filling up the cart and putting things back at the check out," says Candace Corlett, principal at consulting firm WSL Strategic Retail. "I'm going to put it back. They are learning restraint and that is deadly for commerce," she says.
As people tighten belts, so are many companies. Some are cutting back on production and many are reluctant to hire. High prices for energy and other raw materials are squeezing profit margins. The more cautious behavior by people and businesses is rippling through the economy and making for weaker activity.
Research by WSL Strategic Retail found that fashion accessories, home decor items, premium brands or food and specialty coffees, eating at restaurants and take-out foods, and tickets to entertainment, are the top areas where people are trimming their spending.
Starbucks Corp., the world's largest coffee retailer, warned Wednesday that its second-quarter earnings would be weaker than expected and lowered its earnings forecast for the year as the economy's slowdown hit sales, especially in California and Florida -- two markets hard hit by the housing market's collapse.
Far fewer people, meanwhile, are willing to cut back on things like medications, cell phone service and cable TV service, Corlett says. Cable TV and cell phones have become kind of like the "new essentials," Corlett says.
Don't tell that to Acosta, 38, of Jefferson County, Mo. He has given up his cell phone as he struggles to make ends meet while studying to become a nurse and working at a remodeling company. "I can barely afford my utility bills," he says.
With the high price of gas and groceries, Acosta says he no longer can afford little treats like going out to eat or taking in a movie.
Blake, who is not employed, says she and her husband, who is working, are cutting back on these things, too. They also don't plan to take a fancy vacation. "We don't have the money or the extra money," she says. And, she's considering cutting off their cell phone service or moving to a prepaid plan, to reduce expenses.
BIGresearch says 35.2 percent of people polled are scaling back vacation plans.
Even though Blake, Acosta and others say they are eating out less, the government's recent report showed that sales at bars and restaurants posted a modest increase in March from the previous month. Sales at sporting goods, hobby, book and music stores, meanwhile, showed a solid rise in sales.
Cohen's research says video games, toys and skin care products are three areas he believes are least likely to see spending cuts.
For now, there are some things that Blake and Rockwell don't want to give up: health-club memberships. "It's important to be healthy," Blake says.
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