Cecily O'Connor
RedwoodAge.com

Baby boomers are losing confidence in the U.S. economy, but diffidence isn't showing holes in their deep pockets yet.

The nation's 78 million baby boomers - those born between 1946 and 1964 - are considered the most affluent spending group in the U.S., outspending other generations by an estimated $400 billion a year, according to the Department of Labor's Consumer Expenditure survey.

However, boomers may be reluctant to open their wallets further if marketers continue to ignore the over-50 crowd at a time when consumer confidence is falling, said Matt Thornhill, president of the Boomer Project. About 39.6 percent of boomers said they were "confident" or "very confident" about chances for a strong economy in the next six months, according to a June survey of 7,000 consumers by the Boomer Project and BIGResearch, both consumer market research firms. That's down from 47.1 percent in January.

Fears over a spending slowdown are being driven, in part, by fluctuating gas prices and a slumping housing market. Meanwhile, overall growth for the year will be lower than expected, and inflation remains a chief concern. 

Regardless of age, most generations are feeling less optimistic. Combined data from all survey respondents show that 43.9 percent were confident or very confident about the economy in June, compared to 50.5 percent six months earlier.

"If you don't know with certainty what gas is going to be, it's a lot safer to keep money in your pocket than go to Lowe's or take a vacation," said Thornhill, who along with his business partner John Martin, released a new book, "Boomer Consumer, Ten New Rules for Marketing to America's Largest, Wealthiest and Most Influential Consumer."

Boomers' economic doubts are not characteristic of the generation, however, which came of age during the prosperity and consumption of the '50s and '60s.

"They tend to view the world through rose-colored glasses," Thornhill said. "Part of that is they didn't grow up during the Depression or national sacrifices of World War II."

While boomers are in their prime earning years, they still face significant financial commitments, including putting kids through college, paying for their own parent's long-term care, and funding retirement savings.

Marketing to Boomers
Retailers could be in for a rough ride during the second half of the year. However, emphasizing consumers over 50 may ease the potential pain, Thornhill said.

"Apple hasn't marketed the IPod to anyone over the age of 24, but you know boomers are buying the thing," Thornhill said. "I wonder how many they would have sold if they had actually marketed to boomers?"

In general, the automotive industry, has also overlooked the over-50 crowd, Thornhill said. Although a few carmakers are now taking steps now to reach older adults. For example, Honda is making design modifications to the Element, marketed initially to 20-something males, to make it more "ageless" in its appeal, Thornhill said.

"It baffles us that car companies have ignored anybody over 50... We think that will change," Thornhill said.