The article “U.S. Consumers Cut Spending for First Time since January” by Josh Mitchell discusses the drastic changes in the consumption patterns among Americans. The study noted that over a period of thirty days, Americans drastically cut their expenditure particularly on big-ticket merchandise such as vehicles (Mitchell, 2014). Other concerns captured in text include the slow income growth and overall widespread economic lethargy. Mitchell noted that this was a worrying trend since consumer spending represents the major factor for economic growth in the United States. The article concluded with positive news concerning savings habits among Americans (Mitchell, 2014).
The problem of slower consumer spending will reduce the profit margins for mass consumer producers such as vehicle and electronic assemblies. Consequently, the drop in profit margins can trigger massive retrenchment exercises within the private sector in local and international markets. Within the United States, a drop in consumer spending will trigger increased promotion and marketing initiatives by aggressive vendors. The country may witness an increase in offers, promotions and other techniques of boosting sales volumes. In foreign markets, the drop in consumer spending within the United States may have the effect of increasing the availability of standardized luxury goods. Markets in Asia, Africa, and the Middle East will have the opportunity of purchasing high-end products at an affordable price. At an individual level, I have opted to desist from purchasing luxury goods and services such as tablets, digital cameras, cleaning services and laptops. I am also reducing the amount of funds wasted on snacks and other unnecessary meals. I expect to encounter an influx of sales representatives promoting their goods and services on the internet, telephone and through mainstream media.
Mitchell, J. (2014). U.S. Consumers Cut Spending for First Time Since January. The Wall Street Journal. Retrieved from http://online.wsj.com/articles/u-s-consumers-cut-spending-1414758842
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