Personal Finance

Recession Still on Minds of Many Consumers

February 19, 2013 by Credit.com 0 Comments

While consumer sentiment is on its way to returning to pre-recession levels, it seems a number of people across the U.S. are still wary about spending, including credit card use.

According to a report by McClatchy Newspapers, spending among consumers has made great strides in the last few months, with evidence found in higher car sales and more people securing loans of various types. However, some experts have noted that it remains to be seen exactly what kinds of debts consumers will be willing to take on this year, given that the recession’s effects are still fresh in many people’s minds nationwide.

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“Part of this story, beyond this month or this quarter, is the new austerity within the consumer market – both paying off debt and building up savings,” Conference Board economist Ken Goldstein told the newspaper. “That’s not going to go away. It may ease up a bit, but we’re not going back to pre-Great Recession. That world is done.”

Jack Kleinhenz, chief economist for the National Retail Federation, also chimed in regarding the state of consumer sentiment. He told the news source that notable rises in consumer credit recently is a positive sign for the overall economy, stating members of the retail industry, including himself, “never expected [consumers] to fall off the beam.”

One area of the economic landscape that could lead to optimism among analysts across the country is the high number of auto sales seen in recent months. In the past few years, the newspaper notes there has been a marked increase in overall car sales — nearly a hike of 5 million vehicles sold since 2009.

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“The happiest people at a bank right now are in the auto financing section,” Richard Hunt, who heads the Consumer Bankers Association, said Thursday in a conference call with reporters, according to McClatchy.

One clear indication of rising consumer confidence, which may signal continued rises in spending through the start of 2013, was found in the latest Thomson Reuters/University of Michigan sentiment index, which bumped up in mid-February. The level reached a reading of 76.3 during the month, which is higher than the index of 73.8 recored a month earlier.

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