Consumers are shopping less, driving less, eating out less and taking fewer trips. With the economy in a tailspin, there's talk of people rediscovering the art of coupon clipping.
The economic turmoil of the past month, only adding to previous housing and credit woes, has consumers scared and pulling back in a big way.
Consumer confidence hit lows earlier this year, and it's expected to go even lower. Unemployment is rising. The presidential election adds its own measure of uncertainty.
"Conditions are very weak and appear to be weakening even further, and confidence reflects that," said Lynn Franco, director of the Consumer Research Center of the Conference Board in New York.
"You've had ... not only tremendous declines in confidence but in people's ability to spend, with stagnant wage growth, diminishing purchasing power," Franco said. "You have home prices and asset prices declining, and tight credit conditions. So all of that was already curtailing consumers' spending. Consumers have retrenched."
In the short term, consumers are changing habits: where they shop, how often they drive or how they spend leisure time. That means a pullback in big-ticket items and on travel- and entertainment-related expenses, she said.
"It's a tough selling environment for hotels, airlines and rental car companies," said Henry Harteveldt, a vice president and airline and travel analyst for Forrester Research Inc. in San Francisco.
Some expect the trends to continue well into next year or longer. And some of the new consumer habits could be more than temporary.
"Behavior is changing dramatically," said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm in New York. "We're in a different era."
Here are some of the consumer outlooks and habits that have changed, as well as some areas where analysts expect modifications:
Less-confident consumers :
Consumer confidence, falling since August 2007, hit a 16-year low in May before sinking to its fifth-lowest reading ever in July, according to the Conference Board's Consumer Confidence Index. By September, the latest monthly figures available, the index had posted a slight gain, thanks to an improvement in short-term expectations.
But a measure of how consumers feel about current conditions eroded even further. And the business group said the results of its survey, based on a sample of 5,000 U.S. households, did not capture the financial turmoil that erupted in the second half of September.
