Two-thirds of US homeowners spending less-survey

By Jonathan Stempel

NEW YORK, Dec 8 (Reuters) - About two-thirds of U.S. homeowners are cutting spending on everything from new cars to visits to the local cinema, as a troubled economy leads people to reassess how much debt they are comfortable having.

Twenty-seven percent of homeowners said they are putting off big expenses such as a car or home improvement, according to a Wells Fargo & Co (WFC.N) survey released Monday.

Another 37 percent are cutting back on smaller expenses, including things they use day-to-day. Dining out is by far the biggest area being cut back, followed by clothes, groceries and vacation, the survey shows. "Impulse" purchases are also down.

Spending is down as the economy faces a recession that many economists expect to persist at least well into 2009.

A separate survey released early Monday by Discover Financial Services (DFS.N) shows that consumers overall expect to spend 7 percent less this holiday season than last.

Wells Fargo's survey was done Nov. 5-16. A similar survey in July showed smaller spending cutbacks.

"The consumer is going to be spending less," Robert Doll, global chief investment officer of equities at BlackRock Inc (BLK.N), said at the Reuters Investment Outlook 2009 Summit. "The average consumer will continue to pay down debt even after this recession is over, will want a little more liquidity, (and is) going to use the credit card a little bit less."

Margaret Patel, a senior portfolio manager at Evergreen Investments, said at the Reuters summit consumers are "pretty much tapped out." She admitted to pulling in the reins on some of her own spending. "I've gone from 'why spend' to 'don't spend at all,'" she said.

The National Bureau of Economic Research, an arbiter of business cycles, confirmed last week that the economy had fallen into recession.

Though many expect the recession to be particularly deep, "it is possible to have the worst postwar recession without getting anywhere close to what it was in the 1930s," NBER President James Poterba said at the Reuters summit.

The Wells Fargo survey found that homeowners on average carried $16,000 of debt, excluding their primary mortgages.

"Generation X" members, or those born between roughly the mid-1960s and around 1980, on average had $22,000 of non-mortgage debt.

Surprisingly, only 22 percent of those surveyed said the recent plunge in stocks and its impact on retirement were their biggest financial worry. Sixteen percent cited gas prices, 14 percent pointed to medical expenses and 13 percent named jobs. Just 8 percent cited housing.

Among older Americans closer to retirement, 34 percent cited falling investments as their biggest financial worry. (Reporting by Jonathan Stempel; Additional reporting by Kristina Cooke; Editing by Gary Hill)