The financial events of the past few weeks have led to a reflexive recoiling on the part of U.S. consumers.

The latest ChangeWave consumer survey—conducted in late September—shows another major leg downward for U.S. consumer spending. At the same time, confidence in the economy has dropped to exceptionally low levels.

Despite an already severe 15 month contraction, U.S. consumer spending is suddenly veering southwards—with more than half of our 4,067 survey respondents (52%) now saying they'll spend less money over the next 90 days. That's down 8-pts just since August. 

Only 18% say they'll spend more—6-pts worse than in August. (See also: "ChangeWave Hits the Mark on Consumer Spending.")

Reasons for Spending Less

More respondents say they are spending less because they're Reducing Debt (29%; up 4-pts) or Saving More Money (26%; up 5-pts), as anxiety about their financial well being is increasingly driving consumer behavior.

Of course, General Inflation and Higher Energy Costs still rank as the top two reasons consumers are spending less, but in one of the survey's few bright spots, their impact continues to slow for the second consecutive survey. (See also: "Inflation, Energy Costs Transform Consumer Behavior.")

Impact of the U.S. Credit Crisis on Consumers

The extraordinary events of the past few weeks have been well documented—including the Lehman Brothers bankruptcy, the U.S. government takeover of Fannie Mae and Freddie Mac, the $85 billion loan to AIG—and the government's $700 billion bailout bill to help stem the credit crisis and calm the turmoil impacting financial institutions and the stock market. 

The end result has been…