Consumers continue to spend, income growth slows, and inflation remains high.
The debt burden is slowly eating away at disposable income growth.
It remains to be seen whether these pressures will be a headwind for consumers to open their wallets. But there are at least some signs that major spending categories could take a breather.
of personal consumption expenditure from price index Bureau of Economic Analysis According to the data, consumer spending in February increased by 0.8% compared to the previous month.
Over the same period, personal income rose by 0.3%, and overall prices, including food and utility costs, rose by 0.3%. Year-on-year prices matched his expectations, rising 2.5%. Monthly statistics were flat until the end of last year, but the latest figures show an acceleration in inflation.
The personal savings rate in February data was 3.6%, down from 4.1% in January and down from a recent peak of about 5% over the past year. This means that consumers and households are drawing down their savings to pay for needed goods and services.
Personal interest payments (including credit card debt) were $524 billion in February, up from $520 billion in January and above the $510 billion recorded through July.
Savings take a toll
According to data from PYMNTS Intelligence, 15% of consumers say accumulating debt is the main reason they are facing debt pressure. savings, were dipping into those accounts to manage the weight of their debt. More than three-quarters of consumers report using much of their savings to cover at least one large expense.
With consumers saying that an average of 67% of their available savings has been depleted, and that the average consumer faces such depletion once every four years, the lifeline of savings funds is limited. there is. Among consumers who receive paycheck after paycheck, the average recurrence rate decreases to once every 2.5 years. Considering the fact that most of us (more than 60%) live paycheck to paycheck, it means that most of us are feeling the savings pinch.
Individual economic indicators released this week conference board It turns out that consumers have mixed feelings at best about their future. Spending schedule. Measured across 16 categories, from cars to pet care to travel, fewer respondents said they would consider spending in the short term.
Many people said they would spend the same amount over the next six months. He found that 30% of consumers said they expected to spend less on travel over the next six months. Nearly 18% said the same about spending on beauty and personal care items and services. 26.2% said they would spend less at restaurants.