Recessionomics: The Myth of Frugality

James Surowiecki finally serves up a corrective to the laughable notion that a lasting effect of the recession will be to turn Americans from “spendthrifts to tightwads”. In fact, he argues, Americans haven’t reduced their spending by that much now. Here’s a good part:

In fact, you could argue that consumption has actually fallen less than might have been expected. Spending did drop off the proverbial cliff in the fall of 2008, in the direst phase of the financial crisis, but it stabilized at the beginning of this year, and has now risen for four months in a row. And much of the decrease in consumption since early 2008 can be traced to a drop in spending in just two categories: gasoline (thanks to lower prices) and cars.

Does anyone know of any comparable data for Canada? Stephen Gordon, Nick Rowe — you guys have anything to say?

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