The economy may be showing signs of improvement but economists think that consumers will keep their newly-adopted thriftier habits for the long haul. This means that they’ll buy less, so that the economy won’t improve as quickly as it would have if everyone went back to their old ways. But will we be willing to give up on gambling?
Psychologist Michael McCall says, “Several months ago, we were in shock; nobody believed what was happening. So it was a stress-like reaction. Now people are spending less. People are tightening their belts and it is not clear exactly when they will stop tightening and start spending again.
“For years it seemed that no matter what price gasoline reached, people would still travel. Even when gasoline reached $3 per gallon in the United States, individual driving behavior changed very little. But that pricing honeymoon would not last forever. When gasoline hit $4 per gallon during the summer of 2008, that was the price point that changed peoples’ behavior. People stopped driving as much and started consolidating trips. Now, even though the gas prices have gone down, much of the behavior has not reached that pre-$4 a gallon level. We expect the same thing might be going on with other types of consumer spending. People are settling in to maybe five or ten years before we expand back to where we once were.
“Some industries will be hit a lot harder than others. Basic necessities will be OK, but the hospitality industry may be challenged and clearly the auto industry is challenged. People are willing to keep their existing cars and push them a little farther than they did a few years ago.
“Those industries that emerge from these difficult times will probably consolidate. For instance restaurants and department stores may merge and will likely emerge from this crisis in a very different form.” (Buy the dishes and silverware if you like the patterns?)
In these troubled times, it’s tempting to buy a weekly lottery ticket
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