Higher prices are prompting more Americans to hold on to their money.
Despite government efforts to inject more cash into the U.S. economy, higher prices and reduced savings are prompting many consumers to cut back on spending, a recent survey found.
Of 3,773 consumers surveyed by ChangeWave, a Rockwille, Md.-based research firm, 39 percent said they planned to spend less in the next three months than they did at the same time last year. By contrast, just 25 percent said they expected to spend more, the company reported.
High prices were the most frequently cited reason for spending less. Other respondents said they wanted to boost their savings.
According to ChangeWave, the survey results show rebate checks from the federal economic stimulus package will not immediately circulate back into the economy. Less than half of the consumers surveyed said they planned to spend their rebate checks. The rest said they would use the extra cash to pay down debt, make investments or increase their savings.
"These survey findings dispute the notion that consumers will race out to spend their rebate checks," ChangeWave founder Tobin Smith said in a statement. He said the results showed consumers are uneasy about the economy and more likely to wait out the current downturn.