Recessions affect consumer spending unevenly. In most categories, individuals reduce their spending, but in a few categories they actually increase it. A recent McKinsey analysis of consumer spending during the 1990-91 and 2001-02 downturns shows that during these periods U.S. consumers spent less on amenities such as restaurant meals, personal-care products and services, apparel, and entertainment. But they spent more on groceries and reading materials -- both of which substituted for more expensive options -- as well as on less discretionary items like insurance and health care. Spending on education showed the biggest increase.
SOURCE: "Industry Trends in the Downturn: A Snapshot," The McKinsey Quarterly, December 2008.
1 comment:
My graduate advisor friend says that in hard economic times the number of applications for graduate school dramatically increase -- in quantity and quality.
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