- Inflation is finally easing, but the relief may be coming too late for many consumers.
- They’ve already traded down and cut luxuries. Now, they’re digging deeper to stretch their money.
- Some have started cutting back on spending on their kids or walked away empty handed in stores.
Inflation is finally showing signs of cooling, but subtle shifts in how Americans are shopping might be flashing warnings that the relief isn’t enough to ease the strain on their finances this holiday season.
While economists have mostly focused on shoppers trading down to store brands or cutting spending on nonessential items like recreational activities and home furnishings, a deeper dive into how consumers are shopping shows many of them are no longer just trying to save money but practically living paycheck to paycheck. As of November, 63% of Americans were living that way, according to a monthly LendingClub report. That’s up from 60% in October and near the year’s peak of 64% in March.
Even as inflation has slowed to 7.1% in the 12 months to November from a 40-year of high of 9.1% in June, Americans have already buckled under the weight of it. More people are timing purchases around paychecks and maybe, even leaving kids wanting more this holiday, data shows.
The economy has shifted away from a phase when shoppers could buy whatever they wanted, said Marshal Cohen, chief retail industry adviser for analytics firm NPD.”Now the rising cost of living is leaving its mark.”
Inflation…
