If the subprime disaster isn't what's bringing the U.S. economy to its knees - and there's a decent argument that it hasn't - then higher food and gasoline prices will likely do the trick. There's lots of airplay this morning on consumer confidence falling to a 26-year low - worse than even the forecasts. What's more, the Reuters/University of Michigan index of consumer expectations going out six months dropped from last monthís reading. Perhaps that explains why only one-third of consumers polled said they planned to spend the tax-rebate checks they'll be receiving next month. In other words, don't expect any big rush to the malls. To some degree, spending habits already have been adjusted because of higher gas prices. An online survey by Kelley Blue Book Market Research shows that 53 percent of those surveyed say they're eating out less often, up from 38 percent in October. Thatís a pretty painless fix. But only 15 percent said they could consider carpooling or other transportation, up from 10 percent in October. Now consider the source and all that, but we're still not at the tipping point where lives really change because of the economy.
Because of rising gasoline prices....
Eat out less often 53%
Carpool or use alternative transportation 15%
Delay purchase of new home 10%
Shop less for non-essentials 65%
Purchase less entertainment 48%
Will not change any spending habits 22%