Two Thirds of Consumers Say They are Trimming Spending

“The Dow Jones Industrial Average is at an all-time high, the jobless rate has fallen to a four-year low and the housing market is seeing a recovery. But for many lower income and middle class Americans, the improving economy has yet to take hold.

Instead, they are anxious enough about higher gasoline prices and a payroll tax increase to slash their spending.

An online poll of 1,538 people conducted March 4-8 by Reuters/Ipsos found that two-thirds of adults say they are cutting their monthly spending and almost all of the rest say their spending is little changed.

The biggest reason given by those who said they are cutting spending—72 percent of those polled—was increasing savings and paying off debts. The second biggest was higher gas prices, cited by 63 percent.

Of those cutting back specifically because of gas prices or tax increases, 81 percent said they are cutting down on meals at restaurants, 73 percent are reducing entertainment costs such as movies and concerts and 62 percent are spending less on travel and vacations.

At the same time, affluent consumers are showing signs of increased confidence, according to at least one recent survey. This bifurcation may play into concerns about income inequality and could add to pressure on President Barack Obamaand Democrat lawmakers in Congress to resist any budget deficit cutting deal that reduces spending on the social safety net and doesn’t include further taxes on the wealthy….”

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