Housing, stocks woes could pinch consumers

“You’ve had a lot of people buying against their homes, and if house prices fall they’re not in a position to do that anymore,” Baker said.

An overall tightening of the credit market also is making it harder for people to easily get other types of credit at good rates, such as car loans, Bethune said.

“It’s the kind of thing that’s grinding away in the background and will tend to induce consumers to be more conservative,” he said.

On a lesser scale, Baker noted that paying more at the pump for each daily commute could be leaving consumers with less money for things like eating out or buying clothes. Although gas prices have dropped in recent weeks, they remain high by historical standards.

“It just literally is pulling money out of their pockets,” he said.

Wal-Mart Chief Executive Lee Scott echoed that concern this week, noting that gas prices and other economic concerns are weighing heavily on its customers’ minds.

“It is no secret that many customers are running out of money toward the end of the month,” Scott said in a pre-recorded earnings call for analysts and journalists. “The paycheck cycle is, in fact, more pronounced now than it ever has been.”

Although big dips in the stock market have been rattling investors, economists don’t expect the market concerns to cause much more consumer penny-pinching.

For one thing, very few Americans’ day-to-day living expenses are affected by the stock market. Hoffman said he thinks people with retirement funds in the market pay attention to market swings, but he doesn’t think they will change their spending habits unless there is a major downturn that lasts a couple months or more.

Even in that case, he said, the effect will be more psychological than practical.

“I really don’t think it has that much impact on their spending,” Hoffman said.

To him, it would be far more troublesome if the unemployment rate were to rise significantly, since most people are making the bulk of their regular spending decisions based on their paychecks. Hoffman thinks the jobless rate, which currently stands at 4.6 percent, could rise to 5 percent in the coming year, but he doesn’t think that will be enough to push spending down sharply.

“I’m not predicting that consumers are going to throw caution to the wind,” he said. “But it’s not the difference between make or break. It’s the difference between spending spree and spending normally.”

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