Inflation continues to take a bite out of the household budget, to whittle away earnings power. In response, the belts are getting tighter and tighter as we all chase discounts and sometimes even lesser quality goods — all in the bid to conserve as much of the paycheck as possible.
For at least 70 million consumers across the United States, the belief is that the recession has already begun, as detailed in the report “Consumer Inflation Sentiment: Consumers Buckle Down on Belt-Tightening,” a PYMNTS study that drew from a panel of 2,632 U.S. consumers.
In total, 87% of all consumers said their incomes are not rising fast enough to keep up with inflation. These consumers are the most likely of all to be cutting back on nonessential spending, switching to cheaper merchants and buying lower quality items to adjust to this “universal pay cut.”
A large percentage of consumers who saw incomes decrease, stay the same, or rise less than inflation were among those who cut down on non-essential expenses. Of those who saw incomes decrease, a majority — at 53% — switched to lower quality products.
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