Prices tumbling, but people still spending less

12.15.08
By Timothy Jones

If you are like most Americans these days, it takes a lot to make you open your wallet.

With many economists and business leaders predicting that the recession could last through most of next year, you may not be tempted to see in 2009 with any major celebratory purchases.

In fact, a new report released by Bloomberg predicts that people will continue to slash their buying in the coming months, with spending falling by an annual rate of 1 percent next year.

Many people may find they have less money to spend these days - but those who are shopping may find deals on everything from cars and flights to laptops and furniture.

And we already know what the recession has done to house prices, which could be - depending on your situation - a blessing or a curse.

So, could this actually be a golden age for the bargain-hunting consumer? Should you be shopping now to take advantage of deals that may disappear as soon as the economy picks up?

Maybe so, as long as your financial situation is solid and you don't already have significant credit card debt.

Economist David Wyss may have summed it up when he told Bloomberg Television that "one thing recessions are really good at is bringing down inflation."

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Many consumers have put their spending on hiatus