Are Consumers Tapped Out Many Families Cutting Back Their Spending

Consumers Pull Back on Spending Amid Economic Uncertainty

Plummeting Consumer Confidence Drives Spending Cuts

A recent KPMG Consumer Pulse Survey revealed that Americans are planning to slash their monthly budget expenditures. Lower-income consumers are bearing the brunt of the financial burden, as evidenced by the New York Feds Household Spending Survey, which indicates ongoing spending reductions.

Impact on Consumers

* 15% of consumers have ceased all non-essential spending. * Households are dipping into savings and accumulating debt. * Parents are modifying their work schedules to cope with rising costs.

Reasons for Spending Decline

* Depletion of savings accumulated during the pandemic. * Inflation-induced erosion of purchasing power. * Concerns about economic uncertainty.

Behavioral Changes

* Reduction in driving. * Downgrading vacations. * Switching to generic brands. * Seeking discounts and coupons.

Impact on Businesses

* Declining sales in non-essential categories. * Increased competition for consumer attention. * Potential layoffs and business closures.

Future Outlook

Economic experts predict that spending cuts will continue in the near future. Consumers are likely to remain cautious until confidence in the economy improves.

Tips for Consumers

* Create a budget and track expenses. * Prioritize essential spending and cut back on non-essential purchases. * Explore ways to reduce household expenses, such as negotiating bills or finding cheaper alternatives. * Consider increasing income through additional employment or side hustles. * Seek professional financial advice if needed.

Sources:

* KPMG Consumer Pulse Survey: https://home.kpmg.com/us/en/home/insights/2023/03/consumer-pulse-survey-march-2023.html * New York Feds Household Spending Survey: https://www.newyorkfed.org/research/household-consumption