Last fall, a shift began to occur in American society: Americans spent less and saved more. Retail sales fell 2.8 percent, the fourth straight monthly drop in October. At the same time the unemployment rate hit 6.5 percent. In a survey of 1,000 households, 43 percent were eating at home, 25 percent cut spending on hobbies and sports activities. The majority said they would continue when economy improves. The holiday season did not stop consumer spending from decreasing. In December, it decreased by one percent.

This year, Americans continue to spend less. The three-day spending average for February was $61, compared to last year's $140. The 14-day spending average in February was $59. Last year it was $98. Gallup's Consumer Mood Index decreased by four percent in March, and Gallup's Monitor of Consumer Spending was off by 27 percent compared to March 2008. 

Time magazine conducted research on how people are spending their money, and published the results during April. Sixty-one percent of those surveyed think they will continue spending less when the economy is better.

Learning to live sustainably?

As Americans spend less, they are learning to live in more sustainable ways. Many are growing their own food, and making their own household cleaners and laundry detergent. They are ditching bottled water for reusable water bottles, and disposable diapers for cloth diapers.

I asked my Facebook "friends" how they are coping with the recession. Someone responded that he buys "the needs not wants." Someone I grew up with told me she gardens, makes her own laundry detergent and soap, shops at salvage and thrift stores, buys in bulk, and barters with others. She even gave me a recipe for laundry detergent.

My friend is not the only one gardening these days. Many Americans are planting "victory gardens." First started during World War II to cope with food shortages, by 1943 there were 20 million victory gardens which reportedly produced eight million tons of food. First Lady, Michelle Obama planted an organic vegetable garden in March, the first such garden since former First Lady Eleanor Roosevelt planted a victory garden.

The Obamas are in good company. Seven million more households plan to grow their own produce, a 19 percent increase, according to the National Gardening Association's survey. Last year it increased 10 percent.  

I recently read an Associated Press article about people who switched from disposable to cloth diapers. One woman said she was spending about $20 a week on disposable diapers until she switched to cloth. According to the market research firm, Mintel International Group Ltd. cloth diapers are a "fairly large" niche market that is estimated to be about $200 million annually.

Bottled water sales decreased by 10.4 percent during the first three months of this year, according to the Times magazine report. National Public Radio quoted Gary Hempill from the Beverage Marketing Corporation as saying,  "Anecdotally, we believe that consumers last year increasingly drank more tap water." Hempill attributed it to the economy.

Will it last?

When the economy is better will people go back to their super spending ways? No, they will not, according to Joachim Vosgerau, marketing professor at Carnegie Mellon University. "It seems like this trend is only going to continue."

A Business Week article characterized the spending shift as "quiet revolution in American culture." It could very well prove to be a permanent shift. Menzie D. Chin, economics professor at the University of Wisconsin, doesn't think consumers will be able to spend freely for another five years. By that time, Americans will have spent half a decade "channeling" their grandparents, to borrow the phrase from a Time magazine article.

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