by Melinda Barr

Created on: March 09, 2009

It is a well known fact that consumer spending is the greatest protection against recession. Beginning late last fall and increasing rapidly ever since, it has became apparent that consumer spending has been decreasing in leaps and bounds.

This recent downturn in economy is the worst we have seen since 1991. Even the slowdown in 2001 didn't have the potential ramifications that this one has. Every day evidence mounts as consumers cut back on personal expenditures. Personal consumption accounts for over 65% of the economy and is vital to its overall health and wellness.

Consumer confidence continues to decline with each passing day. No class is exempt; this downturn applies to all walks of life although most strongly affects low to middle-class consumers. Satisfaction with the economy has reached an all time low. It is difficult to read the paper each day and watch our local stores and factories lay off another round of people.

Overall, hourly wages and salaries have not dropped, and in fact, the minimum wage in some provinces increased in February of this year. But as more and more people brown bag it for lunch, restaurants and take-out sales decline rapidly. Retail stores are feeling the pinch as more people turn to discount and low-end stores for necessities. Stores on every level were dealt a huge blow when anticipated high Christmas sales did not happen. The automotive industry suffered ongoing plunging sales, resulting in extreme lay-offs. Many parts manufacturing plants resorted to lay-offs, and in some cases, complete factory closures.

With fuel prices and the cost of utilities rising, people are tightening their belts even more. Since we still need to heat our homes, these rising prices further dip into our expendable cash resources. Add falling home prices and a volatile stock market into the equation and the picture darkens a bit more. People who have invested as a means of retirement income are now faced with working past their date of retirement. This has a trickle down effect as fewer jobs become available.

Over the past six months low-wage earners and middle-income consumers have cut back but the wealthy were still spending. This kept high-end stores from feeling the turbulence. However, as the calendar neared December in 2008, the decline in sales began to appear even in the high-end stores. Declining sales in designer clothing, upper-end shoe stores and jewelry stores on all levels were added to the fray.

Credit cards companies have reported a steadily

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