Personal Finances Top Economic Concern for Consumers
Consumers are tapping the brakes on spending and more than half (60%) still say they are “highly concerned” about the state of the economy, according to new data from Numerator. Lower gas prices have helped sooth the pain a little but overall personal finances continue to be the primary concern for US consumers who say they plan to cutback on dining, food delivery, and travel.
Here are the findings from the new study:
-Personal finances remain the top concern among US consumers. Nearly two in five (39%) say personal finances are their primary concern for the coming months, up from 36% who said the same in August. These levels are more than double that of the next highest-cited concern ("world events" at 17% of consumers) and more than 6x that of Covid-19 related concerns (6%).
-The percentage of consumers highly concerned about the economy has dropped. Nearly 60% of consumers have a high level of concern regarding the economy, down 13 percentage points from its recent peak in June 2022 - driven in part by a decreased concern around gas prices.
-Despite the drop among those "highly concerned," nearly all consumers (98%) still indicate at least moderate economic concern. Nearly a quarter (71%) of consumers feel as though the country is currently in an economic recession, 77% think inflation will continue to increase, and 70% expect the economy to worsen in the next few months.
-Despite declines in gas prices, higher-than-normal prices continue to take their toll on consumers. Nearly seven in 10 (69%) say gas prices are impacting their ability to afford other things.
-All income groups express concern about rising prices. More than a quarter (76%) of consumers are worried about rising prices on essential goods and services, while 68% are worried about rising gas prices, and 62% are concerned about rising prices on non-essential goods and services (e.g. travel, restaurants).
-Low income consumers are worried about programs being scaled back. 38% state that they worry about government benefits scaling back (i.e. Social Security, Disability payments, SNAP) - the highest concern out of any income group. Job security concerns are also highest among low income shoppers (19%).
-Middle income consumers are the group most worried about housing. 31% are concerned about the housing market - both stability and affordability.
-High income consumers are concerned about future savings. Over half (51%) are worried about the impact that the economy will have on retirement savings or pension plans, while 43% are concerned about stock market stability.
-Consumers are still uncomfortable with discretionary spending. Nearly three in four consumers (74%) state that they are wary of splurging on premium or luxury items at this time. Taking money out of personal savings or retirement accounts is also uncomfortable for nearly a quarter of consumers (73%), as is spending on non-essential items (61%), investing in the stock market (58%), traveling (57%), and dining out or ordering food delivery (46%).
-In response to rising prices, consumers know where they will cut spending. Dining out (46% of consumers), travel (44%), electronics (42%), apparel (41%), and toys and games (32%) are the top areas where consumers plan to reduce their spend in the following months. However, nearly a quarter (23%) do not expect to cut back at all, holding steady since last month, another sign that economic worries are lessening.
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