As the cost of living rises, Americans are likely to dip into their savings to weather the storm
Key insights about US consumers from Deloitte’s State of the Consumer Tracker
Inflation rose to 9% in June from 8.6% in May, demonstrating that inflation has likely yet to peak. This unabated surge in inflation is likely deteriorating consumers’ purchasing power, with real weekly earnings down 5.6% since end-2020 despite a 6.6% rise in nominal earnings. Consequently, these events have dented consumer spending intentions. The share of Americans delaying large purchases is rising (figure 1). Planned discretionary spending, too, is on a decline (figure 2).
The rising cost of living has also emerged as a factor in concerns about savings, with the share of Americans worried about their current savings nearly doubling since March 2021 to 61% (figure 3). And although the overall percentage of those concerned about upcoming payments has remained relatively stable, the figure is gradually rising for lower-income consumers (figure 4). That is hardly surprising, given inflation tends to hit low-income individuals harder than others.
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