The growing financial crisis in the US is taking its toll on consumer confidence in the economy with real consumer spending falling at an annual rate of 3.1% in the third quarter of 2008 and real spending on durable goods falling at an annual rate of 14%.  American consumers have long been living beyond their means; however, this lifestyle is expected to end as consumers began to focus on saving their money. In the mid-1980s Americans saved about 10% of their income. Lately, however, the savings rate has generally been below two percent, sometimes registering negative percentages; and consumer debt rose to 98 percent of G.D.P., twice its level a quarter-century ago.

The current financial crisis has influenced the changes in American consumer behavior. The “new” American consumer can be characterized as:

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