Americans who were ‘scarred’ by the Great Recession changed the way they spend

Some Americans are still suffering the aftermath of the Great Recession.

People who have experienced long periods of unemployment are more likely to be scarred and tend to spend less money and choose lower-quality items than those who did not experience such hardship, according to a report circulated this week by the National Bureau of Economic Research, a nonprofit economic research group with offices in New York City and Cambridge, Mass.

University of California, Berkeley researchers found people who had been unemployed for long periods of time or suffered from economic shocks also more likely to use coupons and to purchase sale items. Researchers looked at data from various longitudinal household survey, including the University of Michigan’s Panel Study of Income Dynamics, Nielsen Homescan Panel and the Consumer Expenditure Survey.

See: Financial crisis is now ‘officially over,’ and here’s the chart that proves it

The impact of these economic shocks are stronger for younger consumers than older ones and help predict beliefs and behaviors for that generation, the researchers found. When the researchers looked at the Great Recession specifically, they found the younger people were more sensitive and their spending was more negatively affected as a result.

The good news: Consumer goods spending rose sharply in April for a second straight month, which is one indicator that people are feeling more confident about the U.S. economy. Americans are buying more clothes, and are shopping at home-furnishing stores, internet retailers, garden centers and even department stores.

Don’t miss: Americans are hoarding money in their checking accounts

Shopping isn’t the only way people show their scars from the financial crisis. Some millennials, the generation in their mid-20s and early 30s, consider stocks to be too risky and tend to shy away from investing, previous research has shown. They saw what the collapse of the stock market did to their families’ and friends’ life savings.

Instead, this generation chooses to save their money. Almost three-quarters are saving for retirement and 39% are considered “super savers,” according to a Transamerica Center for Retirement study, meaning they save more than 10% of their income. The 42% that do invest do so conservatively, and a quarter hold their investments in cash as opposed to stocks and bonds.

Filed in: Top News Tags: 

You might like:

The Wall Street Journal: White House wants to merge federal Labor, Education departments The Wall Street Journal: White House wants to merge federal Labor, Education departments
Key Words: Will detained migrant children be reunited with parents? No one seems to know Key Words: Will detained migrant children be reunited with parents? No one seems to know
MarketWatch First Take: Micron earnings prove the doubters wrong again MarketWatch First Take: Micron earnings prove the doubters wrong again
In One Chart: The smart money is ready to pounce on distressed debt, but investors must beware the risk of ‘total wipeout’ In One Chart: The smart money is ready to pounce on distressed debt, but investors must beware the risk of ‘total wipeout’
The Wall Street Journal: Argentina, Saudi Arabia to join MSCI emerging-markets index The Wall Street Journal: Argentina, Saudi Arabia to join MSCI emerging-markets index
In One Chart: One millennial’s journey from college to $5,000 a month in disposable income In One Chart: One millennial’s journey from college to $5,000 a month in disposable income
The Wall Street Journal: Michael Cohen quits RNC post, criticizes family-separation policy The Wall Street Journal: Michael Cohen quits RNC post, criticizes family-separation policy
One reason why liberals drink more lattes One reason why liberals drink more lattes

Leave a Reply

Submit Comment
© 7815 Stock Investors News. All rights reserved. XHTML / CSS Valid.