Majority of Americans cut back on spending because of coronavirus, study reveals
Yahoo Finance’s Sibile Marcellus joins Seana Smith to discuss how Americans are changing their personal spending habits amid the coronavirus outbreak.
Video Transcript
- You are looking into a Bankrate study just in terms of what Americans are doing right now, their consumer behavior. And you found that-- and the study found that the majority of Americans have actually cut their spending amid the coronavirus crisis. What do those numbers look like?
SIBILE MARCELLUS: That's right. So 52% of Americans have cut back on spending out of concern for the economy or the stock market. And when you break it down by numbers, you have 47% that cited concern for the economy, 15% for the stock market, another 10% who are worried about both. What we're also noticing, Seana, is that higher income earners, so those making more than $80,000 a year, are cutting back more than low income earners who are making $30,000 or less.
A big reason for that also is because high income earners have investments-- more investments in the stock market. And once they see all that red across the board with the Dow and S&P 500 plunging, and all that volatility, then they cut back on their own household spending. Also, millennials-- some have been taking advantage of volatility to actually put more money into stocks, and others actually chose to move their money out. So it was really a case-by-case basis to see how individuals are dealing with this.
But overall, 2/3 of Americans did nothing to their portfolio. And recently we saw stocks plunge by 30%. I was speaking to Greg McBride. He's the chief financial analyst for Bankrate. And he said, that's a good sign that shows that investors do recognize that this is a temporary economic shock and that eventually, the US economy will bounce back.
- All right, Sibile. Thanks so much.
