PYMNTS Intelligence research has shown that over the years, fewer and fewer consumers have significant savings and are adjusting their spending habits accordingly.
By the numbers
PYMNTS Intelligence’s “New Reality Check: The Nonnessual Spending Deep Dive Edition” of the Paycheck-to-Paycheck Report tracked consumers’ financial lives year by year, and the survey found that as of last summer, consumers were more financially insecure than they were in the past.
The share of consumers who are struggling financially before payday has increased by nearly 3 percentage points from a year ago: By July, 21% of consumers were in this situation and struggling to meet financial obligations.
Among low-income consumers, 34% are having trouble paying their bills, up from 31% a year ago, while the share of higher-income consumers struggling to pay their bills increased to 13% in 2022 from 9%.
Meanwhile, the share of consumers who never run out of money before payday fell to 39% last year, down from 46% in 2021, a seven-point drop over the two-year period.
These changes in the economic circumstances of U.S. households highlight continuing inflationary pressures that are forcing consumers to seek additional tools to control their spending and comply with financial constraints.
Data in Context
Consumer spending appears to have shown little improvement this July, as retailers continue to see consumers cut back on spending and hold off on big purchases, suggesting shoppers aren’t feeling particularly financially secure.
“The failure to achieve sales targets was primarily due to continued tightening by major customers and consumer spending, particularly on higher-value discretionary items.” Bruce ThornPresident and CEO Big Lots“The consumer environment weakened in the first quarter as consumer confidence and sentiment both weakened due to concerns about inflation, unemployment and interest rates,” he told analysts during the company’s earnings conference call on Thursday (June 6).
Similarly, Victoria’s Secret The company noted in a conference call with analysts on Thursday that the “North American retail environment is challenging,” with consumers demanding deeper discounts and creating a “highly competitive” promotional environment, the CEO said. Martin Waters.
