Here’s A Peek at Other People’s Shopping Plans

Most of us think the job market is scary and our income outlook is bleak. So wouldn’t you think we’d be clutching our cash tight in our worried little hands? We’re not.

It seems even more of us are planning to buy cars, homes, refrigerators, carpets and even more new vacuums (seriously? vacuums?) than in late 2007. And back then, our confidence in the economy was high enough to border on cocky.

When it comes to the economy, it totally matters what other people think. The theory goes that if your friends and neighbors are confident in their jobs and incomes then they’ll spend money. And that’s like the tide that lifts all boats — one person buy shoes, the shoe sales-lady hires a babysitter, the sitter goes to the movies…and soon, the economy is sunnier. 

So economists ask us each month how we feel about things and report the results in the form of an index. Even if you don’t know what that is, you’ll quickly understand what we’re about to say. At the moment, the consumer confidence index is 45.4. In September 2007, consumer confidence registered a rosy 95.2.

Yet we Americans just may defy economic theory by spending even more money in our self-proclaimed employment paranoia. Take a look at our shopping plans for the next six months compared to Oct 2007.

Percent of People Who: Oct 2007 Sep 2011
Think business conditions are good 23.2 percent 11.7 percent
Plan to buy a car 6.6 percent 11.4 percent
Plan to buy a home 2.7 percent 4.9 percent
Plan to buy a refrigerator 4.2 percent 6.2 percent
Plan to buy a vacuum cleaner 3.7 percent 6.4 percent
Plan to get new carpet 4.7 percent 8.1 percent
Will take a vacation in the U.S.A. 37.4 percent 38.5 percent
Will travel abroad 9.3 percent 9.8 percent

source: The Conference Board

What can you make of this?

Well, for starters, it’s a great time to be selling vacations – cruise lines, travel agents, rental car companies could be in line for profit-taking. Things aren’t looking to bad for car sales either – which is nice to know if you’re supported by those commissions. It’s also a pretty good sign that the economy might improve – as 70 percent of the fuel driving economic conditions is made up of consumer spending. And darn it, we’re going to be spending.