The majority (86%) of US consumers believe the country is in a recession and more than half (54%) think the current economic conditions will last longer than 12 months, according to the Nielsen Online Global Consumer Survey from The Nielsen Company, conducted last month.
Nielsen’s survey shows that when it comes to predicting the end of the recession, most consumers are pessimistic. Only 18% say they believe the recession will be over within a year.
The least amount of confidence was expressed among 25- to 29-year olds, with just six percent saying the recession would be over within 12 months. More than half (52%) in this age range say they do not feel the recession’s end would come that soon.
Similarly, only seven percent of consumers age 65+ believe the recession will be over within the year, with 63% saying they don’t believe the recession will be over within that time frame.
“Younger consumers grew up in an era of prosperity and have never really known economic challenges to this extent,” said James Russo, VP, Marketing, The Nielsen Company. “To them perhaps, the current economic downturn is uncharted territory. There is a pervasive feeling of uncertainty and concern which is clearly affecting spending levels.”
Women More Concerned
Nielsen’s survey shows that more women (91%) than men (82%) feel the US economy is in recession. Men are markedly more optimistic than women about the recession’s end, with 27% responding affirmatively, compared with only 11% of women. When asked about the state of their own personal finances over the next 12 months, 39% of females responded “not so good” compared to 28% of males. Only 16% of women surveyed think their job prospects over the next 12 months will be good, compared with 26% of men.
Concern Crosses Age Groups
Nielsen’s research also shows that 38% of US consumers consider the economy their biggest concern over the next six months. The finding was fairly consistent across age groups, with older Americans even more worried: 48% of consumers age 50-54, and 52% of those age 55 – 59 cited the economy as their greatest concern. Among all US consumers, increasing fuel prices comes in a distant second place at 10%, followed by debt (9 %), increasing utility bills (7%), increasing food prices (5%) and job security (5%).
“Younger consumers have more time to weather the storm, rebuild their savings, and position themselves for growth,” said Russo. “It is worth noting, however, that older consumers, while understandably concerned, control nearly three-quarters of the net worth in the US and have done a better job of managing their finances with higher savings rates and lower debt levels.”
Consumers are employing a number of belt-tightening strategies to help them cope with economic woes, Nielsen said. Trying to save on gas and electricity is cited by more than two-thirds (67%) of US consumers, while more than half of consumers (56%) say they are cutting back on out-of-home entertainment, spending less on new clothes (55%) and using their cars less often (54%). Just four percent report taking no action at all.
Saving Spare Cash
If they happen to find themselves with extra money in their pockets, the majority of US consumers say they are hesitant to spend it. Once they have covered essential living expenses, 38% put spare cash into savings, while 36% use it to pay off debts, credit cards or loans. Nearly a quarter of consumers (24%) report having no spare cash at all.
About the survey: The Nielsen Global Online Consumer Survey, conducted by Nielsen Consumer Research, was conducted from September 22 to October 6, 2008 among 28,663 Internet users – including more than 500 US. consumers – in 52 markets from Europe, Asia Pacific, North American and the Middle East. The half-yearly survey provides insights into current confidence levels, spending habits/intentions and the major concerns of consumers across the globe.