Despite the improvement in the job market, consumers just aren’t spending like they did before the recession.
More than 60 percent of Americans are restricting the amount they spend each month, thanks to stagnant incomes and a desire to save more, according to a new report from Bankrate.com. That’s despite the record low gas prices that have effectively put more money into consumers’ pockets.
Gas prices in September averaged $2.34 per gallon, more than a dollar less than the previous year. Americans are spending nearly $350 million less on gas than a year ago, reports AAA.
Related: Why Cheap Gas Hasn’t Lit a Fire Under Consumers
The stinginess of Americans varies by age. The most tight-fisted Americans are those age 55 to 64, nearly three-quarters of who are limiting their spending. By contrast, less than half of those over age 65 are holding back on spending.
Millennials are the most likely to say that they’re not spending because they need to save more, while the lack of wage growth weighs heaviest on those over age 50.
The tendency to limit spending could spell trouble for retailers this holiday season, and they may have to offer large discounts to entice consumers to open their wallets.
Both retailers and economists will likely cast a keen eye on September retail sales figures due out this Wednesday. August retail sales reflected a ho-hum back-to-school shopping season but showed some positive growth in new auto sales. Consumer spending accounts for more than two-thirds of U.S. economic activity.
