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Unhappy Holidays

Overstretched and insecure, consumers are reluctant to open their wallets.

December 1, 2009

Consumer spending is the main engine of the U.S. economy, accounting for more than two-thirds of gross domestic product (GDP). But for the past two years, the engine has been sputtering. Much of its fuel, in the form of steady paychecks and easy credit, has evaporated. And many of its parts are aging: nearing retirement, the 78 million baby boomers are trying to rebuild the wealth lost in their homes and their 401(k)s. (Household net worth at midyear was down almost 19%, or $12.2 trillion, from its 2007 peak.) With the personal saving rate rising to an average of 4% in 2009, pundits speculate that a new frugality is taking root. Read more...

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