10/10/2013 - Consumers adhering to frugal spending practices
A new report suggests that more consumers are living within their means rather than going over their budget - and doing so at a rate that hasn't been seen in nearly half a century.
According to the report, which was compiled by RBC Capital Markets and initially reported by Bloomberg, the association between what consumers make and what they're spending is at the closest level seen since 1965 when comparing 2009 to 2013 figures versus the previous six expansionary periods.
Jacob Oubina, senior economist at RBC, noted that this shows just how thrifty Americans have been with their buying behavior.
"The consumer has really cleaned up their balance sheet," Oubina told Bloomberg. "They're growing consumption based on the rate of growth of their earnings, which at the end of the day builds a more solid foundation."
Oubina added the proviso that where there's room for improvement is with regards to credit, as more consistent credit usage can be of great value to consumers, provided they make their payments consistently.
Consumers' credit is also a factor auto insurance providers will use to determine premium pricing. These and other considerations were recently outlined by the Insurance Information Institute.