Consumer Spending Gain Worst Since 1961

Consumer spending is weak, but opportunities for entrepreneurs still abound.

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As my colleague David LaGesse recently pointed out, even Super Bowl XVIII was not able to escape unscathed from the weak demand in the U.S. economy.

Today Commerce released the final numbers for consumer spending in 2008 and the results were not good, as was expected. Bloomberg reports:

Consumer spending rose 3.6 percent for all of 2008, the smallest gain since 1961.

Companies are slashing prices to attract shoppers during the recession, a move that is dragging down profits. EBay Inc., the world’s biggest Internet auctioneer, reported its first quarterly decline on Jan. 22. Revenue fell 6.6 percent to $2.04 billion as sellers cut prices and the company boosted promotions to lure more holiday customers.

The decrease in spending pushed the savings rate up to 3.6 percent from 2.8 percent in November. A positive rate suggests consumers are earning more than they are spending.

I plan on writing much more about how entrepreneurs can find new opportunities in this environment where people are hoarding more of their money. For starters, check out this US News piece on how starting a business in a bad economy is not as foolish as people might often believe.

Also, check out my feature on what businesses still have potential based on long-term trends.

small business

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