Wednesday, November 3, 2010
Open Post #2 - Consumer Confidence
I recently did an informational presentation on a book entitled “Stop Effing Yourself” by Dr. Sean Kennif for my communications class. The book highlighted several ways in which people “eff” themselves in their lives with regards to money, jobs, relationships and health. My group decided to present on how people “eff” themselves when it comes to their money. How do people eff themselves exactly? Well according to the author we are victims of sucker syndrome, participate in brainless buys and are in the pursuit of trying to keep up with the Jones’. This all boils down to the #1 effing problem – NO SAVINGS.
After the 2008 financial crisis, the savings rate increased because people were afraid to lose their jobs and homes. (It’s a vicious conundrum because high savings rate can also correlate to lack of stimulation in the economy). I assume that a healthy balance of both will make for a more efficient market.
Dr. Sean Kennif said that the U.S. savings rate in 2005 was -0.5% and improved slightly to 5% in 2009 after the huge U.S. financial crisis. This sounds promising right? Well our counterparts in Europe and China boast a 25-30% savings rate. The U.S. pales in comparison. According to Dr. Kenniff Americans find themselves in dire straits because they suffer from the sucker syndrome. They give in easily to salespeople, telemarketers, etc. To combat that, victims need to research and educate themselves before going out and buying things. They need to arm themselves with self-confidence and have the willpower to say “no” both to themselves and to the salesperson.
This talk of the recession and no savings may be depressing. There is a light at the end of the tunnel.
According to recent reports, based on consumer behavior, the economy has begun to rebound and reports of the recession coming to an end have begun to show merit with consumer spending. Retail stores reported a 6% growth rate in March. With the beginning of the fourth quarter and key holidays such as Thanksgiving and Christmas – we might be at the beginning of a healthier economy. Consumer confidence plays such a large role in the recovery of the economy. If consumers are not fearful of losing their jobs or homes, this opens up the door to retail therapy.
I realize that my blogs may be pessimistic towards consumer s giving in to instant gratification. But I can ease up a little and allow consumers to purchase at their own discretion. It’s nice to splurge on an iced caramel latte from the Coffee Bean on occasion. So go ahead…..ENJOY….but not too much :)