US Inflation Has 88% Of Americans Worried-Where They Plan To Cut Back
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- US inflation is at its highest in 30 years.
- Most Americans plan to cut back on holiday spending to beat increasing prices in a high inflation environment.
- To do so, shoppers are advised to put a spending strategy in place ahead of the holiday season.
Americans are growing more and more concerned about the rising cost of living and are constantly boosting their US inflation expectations, a new survey reveals.
Driving the US Inflation News
A new survey from Country Financial shows that 88% of those surveyed in a representative sample of U.S. adults were “highly concerned” about the US inflation.
This in the wake of consumer prices rising to their highest in 30 years in October, as measured by the 6.2% year-on-year change to the Consumer Price Index, which is a government measurement on how prices change with time.
But retail spending rose also rose more than expected in October.
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The Country Financial poll was conducted between October 22 and 25 and reveals that a majority of Americans plan to cut back on their spending. Of the over 1,000 adults aged 18 years and above surveyed, almost half (48%) indicated that the areas they plan on reducing over the holidays is eating out and takeout.
In addition, 30% indicated that they don’t plan to upgrade their personal technology devices like smartphones, while 29% said that they will cut back on clothing, 20% are cancelling or delaying their travel plans, and 13% plan to use the car less.
The significant increase in consumer spending that has occurred has been attributed in part to increasing access to funding options such as instant payday loans that are easily accessible online and credit cards. This coupled with pent-up demand due to high level of cash some Americans were able to stock away while certain restrictions limited discretionary spending resulting in the uptick in consumer spending.
Usually, the amount of money people spend increases with inflation as prices rise by default, according to Scott Jensen, manager of the financial planning support department at Country Financial.
Consumers usually react to increasing prices amidst high inflation by substituting the goods they buy. For example, by having a family dinner at grandma’s instead of taking the entire family to eat out at a fancy restaurant.
Consumer spending can also be increasing as Americans make purchases now for products that they expect that the prices will go higher or will be in shortage in future.
Thus, some experts have advised consumers to make their holiday purchases earlier.
Bottomline
In the wake of high US inflation, shoppers are advised to put a spending strategy in place ahead of the holiday season. Consumers need to be conscious of their spending in a high-inflation environment.
Looking for ways to cut back on spending and being strategic about making purchases now and beating price increases and product shortages later is a smart way of spending.
How long the current level of inflation will linger is a matter of expert debate.
