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Even Wealthy Cut Spending as Inflation, Housing Concerns Intensify
Consumers in all income segments are cutting back spending, and doing so to a greater extent recently than at the beginning of the second quarter, according to a comScore study examining changes in consumer attitudes and perceptions about the US economy (via Retailer Daily).
Spending cutbacks are being reported by a greater percentage of people in the lower income brackets: In July, 86% of those with household income under $50K per year said they have cut back spending, compared with 84% who said so in April.
However, concern is also catching up with the highest-income bracket - which showed the greatest increase in cutback from April to July: 72% of those with HH income of $100K or more said they are cutting back - up six percentage points from April.
“Even those consumers with the highest income are increasingly feeling the negative impact of economic factors and are changing their buying behavior accordingly,” said comScore Chairman Gian Fulgoni.
Inflation & Real Estate/Home Values
Inflation remains the top economic concern for most Americans - but especially so among middle- and lower-income households: The percentage of respondents indicating that inflation was their biggest concern increased by 5 points to 67% among households earning between $50,000 and $99,999 and to 70% among households earning less than $50,000 per year.
While the percentage of households earning $100,000 or more who indicated that inflation was their biggest concern actually declined 11 points during the same time period, it appears that their inflation concerns have been displaced to some degree by increasing concerns about real estate and home values, which more than doubled from April to July.
“[I]t’s particularly troubling that the upper-income segment, which represents fully 30% of all consumer spending, is now also showing a rapidly increasing concern about the downturned housing market,” said Fulgoni. “This raises the specter that this important group will further cut back their discretionary spending and cause overall consumer spending growth rates to slow even further.”
Internet Helpful in Finding Pricing Info
With consumers increasingly cost-conscious, many are turning to the internet for pricing information: Nearly three out of four consumers agreed that the internet has made it “a lot easier” or “somewhat easier” to find better, more useful pricing information.
Also, 75% of respondents agreed that the internet would become an even more important channel for pricing information in the future: 41%, “a lot more important”; 34%, “somewhat more important.”Sphere: Related Content