U.S. Baby Boomers, perhaps the biggest consumer age group affected by the Great Recession because it occurred right in the middle of when many were in their prime earning years, remain conservative in their spending, a new Gallup poll shows.
Indeed, while Boomers are spending more on utilities, home maintenance and health care, they’re spending less on leisure activities and clothing, where growth in buying is essential to help propel the ailing economy, Gallup contends.
In all, 45 percent of Americans Gallup polled said they were spending more today than they were a year ago, while 18 percent said they were spending less. Across several demographic categories, the percentage of respondents who said they were spending more was relatively stable. Among the groups most likely to say they have increased their spending is millennials, while members of Generation X were least likely to say they were spending more.
For its research, Gallup conducted telephone interviews between June 9 and 15 with a random sample of 1,029 U.S. adults ages 18 and older. The margin of sampling error is plus/minus 4 percentage points at the 95 percent confidence level, according to the research company.
The general poll finding that Americans are spending more this year compared with last, but not on the things they want, appears, in part, to be driven by Boomers’ spending, Gallup said. More than half of all members of Gen X and Boomers were less willing to spend this year compared with last year, but Boomers nonetheless found themselves spending more on such essentials as utilities, home maintenance, household goods and healthcare.
“With baby boomers still commanding a substantial share of consumer spending, until they are more willing to spend on discretionary items, their increased spending will probably do little to aid an ailing economy,” Gallup said.
Conversely, millennials—the youngest adult Americans—were bucking that trend, as they say they are spending more in some discretionary spending categories such as leisure activities and clothing.
“This may be because younger people can generally spend more on discretionary items, if they have lower housing costs and are not providing for children,” Gallup said. “Millennials’ share of the marketplace is also substantial; these younger consumers are beginning to do their part to help the economy improve.”
Indeed, among the generations millennials were more likely than the oldest Americans, or “traditionalists,” to report spending more this year than a year ago on rent or mortgage at 39 percent versus 24 percent; leisure activities (38 percent vs. 21 percent), and clothing (31 percent vs. 16 percent). The other generational groups' spending reports fell midway between these two, Gallup said.
Although Boomers said they were generally less willing to spend this year, they were spending significantly more than they did a year ago compared with millennials on household essentials such as utilities at 53 percent vs. 37 percent; healthcare (50 percent vs. 37 percent), home maintenance (39 percent vs. 23 percent), and household goods (37 percent vs. 26 percent). The other generational groups again fell in between these two, Gallup said.
The generations also differ in their frugality, or at least in their attempts to save money. Not unexpectedly, at 70 percent, members of Gen X and millennials were significantly more likely than were the older generations to go online to compare prices. And at 72 percent, Boomers were significantly more likely than were other generations to say they shop at more than one store for similar items to get the best deals.
At 44 percent, Traditionalists were much less likely than any of the others to purchase more at the store than they intended, while only 19 percent said they go shopping for fun and just 26 percent made an impulse purchase.