Smart. Sharp. Funny. Fearless.
Friday, October 28, 2016

A new report on consumer spending shows that consumers are not spending. Economists thought that the savings from cheaper gasoline — hundreds of dollars a year for most — would be hauled to the stores. But non-gasoline retail spending didn’t budge last month, flat after falling a bit in December, according to the Commerce Department.

The strengthening job market and expected wage gains should also be making American shoppers feel more exuberant, but no. That’s a concern in a country where consumer spending accounts for two-thirds of the economy.

Here’s my explanation for what’s happening. There’s been a growing aversion to the shopping way of life. There’s a sense that the consumer culture has been a con job, epitomized by the sucker punch of last decade’s real estate bubble (and attendant mortgage scams).

There’s also a feeling that one traditional motive for buying stuff — the competitive race to “keep up with the Joneses” — is futile. The famous 1 percent are pulling away so fast from the other 99 percent that there’s no point in trying. Even the “merely affluent” can’t compete.

A study in Britain found that money only makes people happier when they have more than their neighbors. It’s more about social rank than the number of zeros behind one’s personal wealth. A millionaire feels poor in the presence of the super-rich.

Thus, the ever-inventive American culture has found a new way to rank people socially. More of us are replacing price tag display with the hip alternative of living in small spaces with fewer, but more curated, possessions. Rather than hire experts to make our closets accommodate more stuff, many are deciding to simply have less stuff. We are driving fewer miles, and many millennials are forgoing car ownership altogether.

The Commerce Department reported that the personal savings rate rose to nearly 5 percent in December, up from 4.3 percent the month before. Interesting.

The new social ranking system may be influencing some for whom the money race is theirs to win. The Wall Street Journal publishes a weekly section called Mansion, which centers on luxury real estate that tends to be enormous in size and astronomical in price. But in the aesthetic of minimalism chic, the architectural hulks — with their onyx bars, guest villas and ionized lap pools — seem dated.

So the recent Mansion section had a feature on “little getaway houses,” small homes for those who live big. These were not your worn cabins in the woods but spectacular little places, often on lots with primo views.

“Keep it simple,” said an investment manager who has a smallish house on the Maine coast — but owns several other homes, where the art is kept. Small, in this case 1,200 square feet, need not be inexpensive. The house is built on reinforced fiberglass piers that let the waves roll under it. (If you’re going to do waterfront, do waterfront.)

Another small house, 1,000 square feet on Washington state’s Padilla Bay, has a glass cover and hand-planed cedar floors. “The more intimate the house, the more it supports the need for connection,” said one of the proprietors, who also owns a hacienda in Chiapas, Mexico.

To keep some perspective on what constitutes small, note that families of six were quite content living year-round in their 800-square-foot Levittown houses. But one can appreciate the desire of the wealthy to escape their toad halls for some cozy time in a badger cottage.

Many Americans of more modest means, however, are dispensing with the mansions altogether. You don’t feel behind in a race you don’t enter. And if these weakened material aspirations are here to stay, things won’t be looking good for the consumer economy.

Follow Froma Harrop on Twitter @FromaHarrop. She can be reached at [email protected] To find out more about Froma Harrop and read features by other Creators writers and cartoonists, visit the Creators Web page at

AFP Photo/Scott Olson

  • Dominick Vila

    I don’t think cautious consumers are spending less because of the futility of trying to keep up with the elite. A more likely cause involves the psychological effects of the Great Recession, and the fact that many Americans don’t want to get caught with a lot of debt when the economy tanks again. The Great Recession was a wake up call for most middle class and poor Americans. It taught, at least some of us, that we are not invincible, that buying houses and expensive cars that we can ill afford simply means foreclosure or bankruptcy when anything goes wrong.
    There is nothing wrong with a higher rate of savings. Unfortunately, in an economy that depends largely on consumer spending, fiscal conservatism at a personal level can be a death blow for sustainable economic growth.
    In any case, it is too soon to lament the end of our economic growth and job creation. Severe weather has affected shopping, and continues to do so. Let’s wait until April or May to make predictions based on reality, rather than speculation.

    • Alvin Harrison

      I believe you are 100% right. American’s are not a stupid people. The recession scared the hell out of them when they were shown just how vulnerable they were. With this small respite, due to lower gas prices, they are circling the wagons and tightening up the ship.

      I have always advocated savings. I am probably better off than most. But I m not buying a new car. I am (but always have) avoiding credit card or any other kind of debt….and I just plain removed myself from the game of money defining who I am. Personally I am happy to see my fellow Americans doing the same….the relief of the stress caused by the “rat race” will lead to healthier and happier lives.

  • atc333

    For many consumers, it is simply avoiding unnecessary spending. It was one thing in the years before Reagan, when 92% of the Nation’s wealth was in the hands of the 98%. and good paying jobs were available. Today, is greatly different, almost 50% of all the wealth of this nation is in the hands of the top 2%, together with their massive political power and influence in Congress, This will remain unabated, thanks to unlimited campaign contributions being made available to buy access and “influence” the legislation before our politicians in Congress.

    We see Fox News claiming a constitutional right to lie to its viewers, on issues, regardless of the truth, and a Florida Court agreeing with that argument. further proof of the intentional “dumbing down “of the American citizens.and voters.

    For some reason, Congress has concluded that the Middle class and higher paid blue collar workers are and were not the engine that drives our economy. Instead, it is the “job creators” who are coddled and protected, with tax cuts, and tax deductions as they continue to ship more jobs overseas, continuing to impose the same failed economic theories which have resulted in the destruction of the middle class, the expansion of the numbers of the working poor, and the decline of the economic strength of the American people.

    • Frank KIng

      Reagan’s “trickle down” has sucked money out of the conomy and placed it in the pockets of the upper class as it was intended to do. Right wing politicians view this as their Bible to reign economic-fiscal-financial misery upon the nation. Couple this disaster with the SCOTUS and its Citizen’s United decision that money is votes then with the Group of Pinheads now in total control of the government and our lives, except for the Presidential veto, the onslaught against any type of economic recovery for the majority of Americans except for those well positioned is destiny.

  • Whatmeworry

    Not hardly, people aren’t spending because they aren’t sure what taxes Barak will raise

    • Daniel Max Ketter

      People aren’t spending because they don’t trust those losers running our congress now.

  • Whatmeworry

    People aren’t spending because they don’t trust the new amateurs in congress