California consumers spend less: survey

08:12, October 27, 2010      

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Although feeling better about the economy's prospects, many Californians are spending less, according to a survey released on Tuesday.

The survey, conducted by Citibank California from a random sample of 1,206 respondents, found that 63 percent of consumers were reducing credit card purchases, 55 percent were working to lower debt, and 54 percent were postponing a major purchase.

The top two ways Californians have curbed spending are to splurge less in restaurants (71 percent) and on clothes (69 percent). Survey respondents said they were also going to the movies less, buying fewer name-brand items and deferring home improvements.

About 60 percent of respondents said they had cut back on discretionary spending and holiday travel plans.

Only four percent plan to travel more during the holidays this year, while 30 percent will travel less and 43 percent have plans similar to last year.

Consumers have shown reluctance to cut back on cellphone and Internet use, said Rebecca Macieira-Kaufmann, president of Citibank California.

"People seem to be prioritizing social networking over spending money on food or clothes," Macieira-Kaufmann said.

Despite most people's reluctance to spend, the survey detected a slight bump in "optimism index" concerning perceptions about economic conditions.

The index improved to zero in the third quarter from minus three in the second quarter (on a scale of minus 100 to 100), even though most of those surveyed rated current economic conditions negatively. The minimal increase boosted the index out of negative territory for the first time since Citibank began the surveys in the third quarter of 2009.

"It doesn't just show optimism from consumers about the future; it's also about respondents' current situation," Citibank spokesman Robert Julavits said. "They're saying that even though it's tough out there right now, they feel good about the changes that they've made and they have a lot more control of their spending, saving and borrowing."

Source: Xinhua


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