Individuals who have had personal experience with "economic shock," are more likely to spend less, and on lower-quality items than others, according to a new report.
The report from nonprofit National Bureau of Economic Research found that the "shocks" are stronger in younger consumers than older generations. The shocks also "predict beliefs and behaviors for that generation," as younger people were found to be more sensitive, and their spending was more negatively affected. MarketWatch reports that Millennials are saving their money, as about 75 percent are saving for retirement, and 39 percent are "super-savers," meaning they save more than 10 percent of their income. Rather than investing in stocks, many in this cohort are saving their money as cash.
The good news: Consumer goods spending rose sharply in April for a second straight month, which is one indicator that people are feeling more confident about the U.S. economy. Americans are buying more clothes, and are shopping at home-furnishing stores, internet retailers, garden centers and even department stores. Shopping isn’t the only way people show their scars from the financial crisis. Some millennials, the generation in their mid-20s and early 30s, consider stocks to be too risky and tend to shy away from investing, previous research has shown. They saw what the collapse of the stock market did to their families’ and friends’ life savings.