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Consumer Stats Summary for 2009While financial experts and pundits seem always to await the end of year stats with bated breath, these statistics do not only benefit the experts. Being familiar with economic statistics can be useful to the average person as well because they offer valuable insight into the overall condition of the economy, an important tool for making smart, solid financial decisions. With the economic challenges we face today, striving to be as fiscally informed as possible is the best way to protect financial health and well-being over the long term. Like 2008, the year 2009 saw record-breaking economic changes in response to the continued fiscal challenges faced by the United States, as well as by the entire world. The social affects of these changes can be seen in the consumer statistics of 2009, as greater numbers of people are starting to seriously reassess their lifestyles and spending habits in the face of economic turmoil and uncertainty that doesn’t seem to be settling down anytime soon. Historic Fall For Retail Sales According to a January 14, 2010, Associated Press report, in 2009, retail sales as a whole experienced “the largest drop on record.” In fact, as pointed out in a MarketWatch.com article from the same date, “it was only the second decline on record.” The other one took place during 2008. Information released by the US Census Bureau on January 14, 2010, stated that “total sales for the 12 months of 2009 were down 6.2 percent (±0.2%) from 2008.” The data revealed some interesting facts regarding the spending of Americans during the 12-month period of 2009. Noting that the figures do not reflect price changes, something to bear in mind when considering data like the 24.5 percent lower sales for gasoline stations when compared to the numbers for 2008, some of the steepest declines in retail sales were seen in home furnishings, which were 11.1 percent lower in 2009 than they were in 2008, building materials and gardening equipment, lower by 11.6 percent, and sales by motor vehicle and parts dealers, which saw a 12.3 percent reduction in retail sales as compared to 2008 numbers. Some areas saw a slight increase in retail sales during the 2009 period. Retail sales at food service and drinking places saw a 0.7 percent increase over totals for 2008. Health and personal care store retail sales went up 3.3 percent and food and beverage store retail sales rose by 0.3 percent in 2009 from the 2008 numbers. These changes could indicate lifestyle changes and a reordering of spending priorities on the part of the American consumer. Consumer Credit and Consumer Debt Patterns The Federal Reserve’s G-19 report, released January 8, 2010, showed that consumer credit continued its pattern of decrease, as did revolving credit and non-revolving credit. According to the report, “consumer credit decreased at an annual rate of 8-1/2 percent in November,” the lastest figures for 2009 at the time of this writing. Furthermore, “revolving credit decreased at an annual rate of 18-1/2 percent, and non-revolving credit decreased at an annual rate of 3 percent.” Revolving credit is primarily credit card debt, and it should be noted that not all of the decrease is necessarily due to consumer debt reduction. When banks write off bad credit card debt, it is no longer counted under revolving debt. CardTrak.com reported on January 7, 2010, that “credit card delinquencies, based on total dollars outstanding, rose for the third consecutive quarter, soaring to nearly 6.7%.” The 2009 third quarter delinquency rate of 6.69 percent is a significant increase over the 2008 third quarter rate of 4.74 percent. The double-digit rates of unemployment and record-breaking rates of foreclosure experienced during 2009 probably contributed to this upward trend. Personal bankruptcies rose during 2009 as well, according to a January 11, 2010, CardTrak.com report, increasing to just over “1.4 million, compared to the 1.1 million total consumer filings recorded during 2008.” Data from the Federal Reserve’s Household Debt Service and Financial Obligations Ratios Report, updated last on December 18, 2009, at the time of this writing, showed some interesting changes. According to their figures, the household debt service ratio (DSR) for the third quarter of 2009 was 12.85 percent of disposable income, as compared with 13.61 percent during the same time period in 2008. With other financial obligations added in, such as rent or mortgage payments and car payments, renters spent 24.50 percent of their disposable income meeting debt service and financial obligations, with homeowners spending 16.36 percent, during the third quarter of 2009, slightly down from the 2008 third quarter numbers. Personal savings in November and October of 2009, according to data from the US Department of Commerce’s Bureau of Economic Analysis that was published on December 23, 2009, “as a percentage of disposable personal income was 4.7 percent in November, the same as in October.” This trend towards increasing personal savings was seen throughout 2009. There is much to be learned from economic statistics that is of interest to the average person trying to make the right financial decisions in an economically unsettled period. Increasing numbers of American consumers seem to be focusing on reducing debt, increasing savings, and on smarter spending patterns, a focus that will, over the long-term, help to create a stronger and more stable economy for the future.
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