Survey Shows Wealthy Americans to Decrease Spending
Nov 18, 2004
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While the majority of affluent Americans remain optimistic about current and future business conditions, an increasing percentage is showing concern about business conditions, the stock market, and their own personal household income 12 months from now. According to market research firm AARC, the overall index for these three factors continued a decline that began 6 months ago and is now back to the Fall 2002 level, the record low for these surveys.
Against this backdrop, the wealthy are displaying mixed signals about their future spending plans. With the exception of new automobiles, their plans for major purchases such as homes, boats, home remodeling, and cruises remain relatively strong. As in prior surveys, the wealthiest 1 percent and wealthiest 5 percent of Americans are the most optimistic in their economic outlook and are more likely to plan increased spending.
Spending plans for the next 12 months were also tracked for 17 categories of goods and services, including home durables (major appliances, computers, furniture/furnishings, and entertainment equipment), leisure activities (casual and upscale dining out, entertainment, and recreation), domestic and international travel, designer and non-designer apparel, collectibles, fine jewelry, and political and charitable contributions.
Of the 17 future spending indexes, 11 are lower now than 1 year ago, two are the same, and four are higher. Nine indexes are at negative levels. Planned spending for international vacation travel is at a positive level for the first time since the surveys began, while planned spending for major appliances is at its lowest level ever.
This new survey also provides information on plans for travel outside of the continental US during the fourth quarter (including favored destinations, cruises, hotel brand preferences, and the length and cost of the vacation), the purchase of designer apparel during the prior 90 days (including the brand, the price, and the store where purchased), and major appliances purchased during the prior 90 days (the type, price, brand, and store where purchased).
AARC's survey was of 412 men and women in the wealthiest 10 percent of American households. The survey participants have an average income of U.S. $329,000 and an average net worth of almost $3 million. They control 70 percent of the private wealth in the U.S.
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