Many economists predict a recession in the US. The unprecedented health crisis followed by a disrupted supply chain brings disruptions to the economy. The number of retail buyers is decreasing. In some cases, even if the number remains the same, the spending significantly decreases. Inflation is starting to take a heavy toll on US consumers spending.
A study finds that 70% of US consumers are reducing their spending on retail purchases to pay for the rising cost of basics such as groceries and gas. Even the cost of gasoline was very high. Although now, the cost of gasoline is slowly coming down.
Gasoline costs might decrease, but groceries and essentials remain expensive. The cost of feeding families is high. Nearly two-thirds of US consumers say they expect the cost of food to continue to rise into next year.
After the pandemic, people are obnoxiously concerned about health care. After a long gap, the workforce is returning to the workplace. Children are going to school. This has made people invest more in healthcare.
Bank of America reports that childcare spending has reached 2019 levels for 94% of their customers. With the rise in prices of essentials, prices of other things are also not stagnant. US consumers are seeing rising house rents, childcare services, etc.
To keep a balance among all the rising expenses, US consumers prefer to reduce their retail purchases. The purchasing power of US consumers shrank by 12% over the last two years.
The only business which sustains the financial crisis is groceries store. 78% of US consumers plan to eat more at home to save money. This ultimately leads to more grocery shopping.
With the serious situation in hand, the pay has also not increased. US consumers are sad about their insufficient salaries. The income remains constant or decreases, whereas the expenditure is constantly increasing. 79% of US consumers complain of a deteriorating financial condition.
All middle-income earning families are now distressed. They consider themselves poor for not being able to arrange basic amenities comfortably. The US recession will eventually affect the whole world. So this can be a warning to many.