Consumers are paying off debt
Before 2008, consumers spent years on a spending spree with easy credit and a consistently high-performing stock market. Following the financial crisis, analysts have noted significant behavior changes. For instance, consumers have become more hesitant when making purchases, particularly for high-priced items such as homes and cars, says Greg McBride, CFA, Bankrate's senior financial analyst.
"Credit isn't as easy to get as it was before, so consumers are unable to lean against it to support their lifestyles," McBride says. Even as credit becomes more available, the qualifications for loans are much more stringent than previously.
Additionally, there has been a trend toward consumers paying off debt. The debt service ratio, which shows the percentage of income related to debt payments, is "the lowest it's been in more than 30 years," McBride says.
From an investment standpoint, consumers have become more risk averse in the past five years. Despite low interest rates and stock market highs, Bankrate's April 2013 Financial Security Index showed that 76 percent of Americans are not inclined to invest in stocks, which McBride attributes to fear generated by the market meltdown.
Some consumers' attitudes toward investing in the stock market may be permanently changed, but McBride forecasts that the emphasis on paying down debt and spending more conservatively is temporary. "If we see wage growth and economic growth, people will return to their habits of overspending and relying on credit," he says.