WMU News

Global economic woes are far from American consumers' thoughts

November 19, 1998

KALAMAZOO -- The economic troubles plaguing southeast Asia and Russia have barely dented American consumers' shopping enthusiasm. According to Dr. Christopher Korth, WMU professor of finance and commercial law and an expert on international business, Americans are "on a spending spree." "The stores are pretty optimistic that they will see a three to five percent increase this Christmas," he says. "The American economy is being driven by consumer spending right now. Part of that is a result of the 'wealth' factor where people feel wealthier because of the increase in stock prices. People are worried about jobs, but they don't seem to be worried about their jobs. They hear of layoffs, but it doesn't worry them." Korth warns however, that the aggressive spending can't continue indefinitely. "Last month the U.S. had a negative savings rate, which is unprecedented in American history," he notes. This means people are spending more than they are saving. And unlike other seasonal ailments, Americans don't seem too concerned about catching the economic flu. "There isn't a widespread perception among American consumers of risk from overseas," says Korth. "The economic troubles in Asia and Russia don't bother people in Dowagiac. They don't think these problems affect them." Korth can be contacted at (616) 387-5371.

Media contact: Marie Lee, 616 387-8400, marie.lee@wmich.edu

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