Inflation continues to impact the financial lives of American consumers, with a new survey by the Federal Reserve showing that rising prices have made nearly two-thirds of households “worse off” financially.
The data contained in the latest survey:economy Wellbeing of U.S. households In a survey covering 2023, 65% of consumers said they would be more likely to pay for things due to rising prices. had a negative impact Of the 65% of respondents, 19% said the situation was “much worse.”
Inflation remains the “number one” financial concern, according to Fed data. inflation A decrease in interest rates from historical levels.
There are signs Expenditures The Fed report found that 34% of consumers said their monthly income in 2023 will be higher than in 2022. But 38% said their monthly expenses will be higher. Increased.
Credit tightens
When it comes to credit, the Fed found that “the share of people who were denied credit or approved for less credit than they applied for increased by 2 percentage points from 2022 and 5 percentage points from 2021.”
Use of “buy now, pay later” (BNPL) is on the rise, with the Fed estimating that 14% of adults used BNPL in the past 12 months, a 2 percentage point increase from 2022. More than half of BNPL users said it was the only way they could finance their purchases.
Reflecting life before payday, 48% of adults said they spent less than they earned in the previous month, meaning about 52% of consumers were barely making ends meet, meaning they were spending more than they earned.
This data is provided by PYMNTS Own The vast majority of U.S. consumers, roughly 60% of the adult population, Live before payday. And as can be seen here, More than one-third of consumers are using BNPL, and the proportion is roughly equal across all income levels.
The cost of groceries is unacceptable
“Many mentioned the cost of food and groceries when describing inflation-related challenges,” the Fed said, adding that on the income side, households earning less than $100,000 were more likely to specifically cite the cost of food and groceries as a concern.
PYMNTS Intelligence reported: 65% of Gen Z consumers use installment payments. Of those, a whopping 45% use installment payments for grocery purchases. and As per details As the year comes to an end, About 58% of consumers across nearly all income levels say rising food prices are causing them to cut back on non-essential spending.
