Higher Housing and Gas Costs Squeeze What’s Left for Shopping
Consumer prices accelerated in August, adding to household expenses at a time when many financially constrained consumers have already reduced the discretionary spending they can most easily cut. The Consumer Price Index, released Friday (Sept. 11) by the Bureau of Labor Statistics, rose 0.4% in August on a seasonally adjusted basis and 3.4% from a […] The post Higher Housing and Gas Costs…
In August, the Consumer Price Index rose 0.4% seasonally adjusted and 3.4% year-over-year, driven by increases in shelter, energy, and food prices. Housing saw a 0.3% increase while energy rose 2.1% and food prices were steady, but still higher than a year ago. Major expenses like housing, groceries, and gasoline are crucial spending decisions before allocating funds to discretionary purchases such as dining out or travel.
Consumer expectations data revealed that 53% of financially constrained consumers had already reduced nonessential spending like dining out, entertainment, and travel. Only 27% of those who can easily make their bills increased their spending on nonessentials. Meanwhile, 41% of those with adequate savings and income were still able to spend more on discretionary items, while 27% reduced their spending.
Major purchases remain a challenge for consumers, regardless of financial situation, as indicated by the Macro and Buying Climate Subindex, which remained below neutral throughout the period.
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