New Study Identifies Who They Are

• Pessimists.  They are a little more likely to be women (52% vs. 48% male), they are a little older (49 years old, on average), and they are not quite as affluent ($60,468 household income, on average). Interestingly, they are LESS likely to live in the Eastern part of the US.
• Optimists. Men are more optimistic than women (54% vs. 47%). The average optimist is 5 years younger than a pessimist, and his or her household income averages $10,000 more per year. Optimists cluster in the Eastern part of the US (27% vs. 17% of pessimists). 

There are several things we can read into these results. First, older people--including retired people and those preparing to retire--feel more at risk than younger people, who can more easily ride out this period.

The burden of supporting families may be felt more deeply by women than by men. Women tend to be more pragmatic than men, and view the loss of a job or reduction of income in terms of its practical implications: food, shelter, education, and clothing. Moreover, single-parent families are overwhelmingly headed by women and job losses hit them even harder.

These measures will be worth tracking; if the government attempts to stimulate the economy are effective, we may see some changes by the summer--fourth quarter at the very least.  If they aren't effective.....let's not go there.

Since last November, more companies have been tightening the reins on spending.

• Delays in enacting marketing plans or expansions went from 12% to 33%.
• Reduction in T&E spending nearly doubled from 16% to 31%.
• Increased problems with collections or bad debt more than tripled from 9% to 29%.
• Delays in granting raises or bonuses nearly tripled from 10% to 29%.
• Declining sales rose from 16% to 29%.

People have noticed stunning changes in their communities.

• Small and large business closures were observed by more than 80% last month, compared with 14% last November.
• Less crowded retail stores were noticed by 75%, vs. 19% last Fall.
• Less crowded restaurants were mentioned by two-thirds of respondents in March, compared with 21% last time.
• 'Increased home sales" have tripled: 22% mentioned this in November, and 67% said so in March. In addition, observed foreclosures rose from 10% to 23%.
• Stalled or abandoned construction sites were noticed by 12% last Fall, but by 47% last month.

On the personal side, we see some of the reasons for the observed changes in communities.

• Nearly two out of three respondents have cut back on "various personal purchases."
• Fewer people are eating out--this reduction more than doubled from 24% to 53%.
• 41% have reduced entertainment expenses, aside from eating out.
• Twice as many people have pulled money out of the stock market or mutual funds (13% rose to 27%), and a few more did not add to retirement funds (7% went to 18%).
• A few more people have postponed or cancelled major purchases such as automobiles and major appliances (15% to 25%), and 20% have postponed or cancelled home improvement plans.
• Luckily for my readers and friends, few are concerned about losing their jobs. Of course, a number are retired or in their own businesses.

Concerns about the overall economic situation are varied, but cluster around retirement savings (21%), the financial industry (20%), the stock market and government spending (12% each). However, several people noted that they are concerned about all of these things, and that, indeed, they are all interconnected--and possibly interdependent.