Most American adults have cut spending this year, according to a new CNBC-Morning Consult survey, which also revealed that consumers plan to stay frugal through the holidays.
A whopping 92% of adults have cut back on discretionary spending over the past six months, CNBC found after polling 4,403 US adults last week.
Consumers were most skittish when shopping for clothes and dining out at restaurants — 63% and 62%, respectively.
The news site’s poll also showed that consumers at all income levels are feeling pinched by the economy. While labor strikes in Hollywood and Detroit provoke fresh uncertainty, inflation rose a surprisingly stiff 3.7% last month — still well above the Federal Reserve’s 2% target.
Fifty-five percent of lower-income households earning $50,000 or less annually told CNBC that their personal finances are suffering from the state of the US economy, while 61% of middle-income earners bringing in $50,000 to $100,000 are feeling the squeeze.
Even among the highest earners with annual incomes exceeding $100,000, 46% said they’re feeling the impact of the economy on their finances.
More than three-quarters of respondents, 76%, plan to cut back spending on non-essential items over the next six months, during retailers’ all-important holiday shopping season, while 62% said they plan on budgeting “sometimes” or “more often” in the upcoming months, CNBC found.
Meanwhile, 56% of surveyed respondents said they were spending less on entertainment outside the house despite reports of recent summer splurges on blockbuster movies and concert tours, namely Taylor Swift’s sought-after “Eras Tour,” which is on track to amass a record-breaking $1 billion in sales, making it the highest-grossing tour ever.
Groceries saw the next-biggest budget reduction, with 54% of respondents saying they’re spending less at the supermarket, according to CNBC.
The results came just one week after the Bureau of Labor Statistics’ closely-watched Consumer Price Index showed that food prices rose 0.2% for the third consecutive month in August as the index for meats, poultry, fish, and eggs advanced 0.8%.
The index for pork edged 2.2% higher.
CNBC’s survey also showed that 53% of respondents will be cutting back on recreational travel spend, while 50% won’t be quick to splash out on electronics — a figure that could spell bad news for Apple, which is set to drop its “industry first” iPhone 15 on Sept. 22 for up to $899 depending on storage capacity.
The latest inflation numbers represent a stark slowdown from last summer when inflation hit a four-decade peak at 9.1%.
Still, it remains well above the Fed’s 2% goal and marks an acceleration from the previous two months.
In June, inflation bottomed out at 3%, and rose to 3.2% in July.
As Wall Street expected, rising gasoline costs were the main culprit of August’s advance, ticking 10.6% higher last month and accounting for over half of the increase, the data showed.
As of Tuesday, the national average of a gallon of gas stood at $3.88, rising some eight cents in the span of a week, according to the American Automobile Association.
The most eye-watering prices were seen in some parts of California, where gas is running residents more than $6 in some parts of LA and as much as $7 in other parts of the state.
At this time last year, a gallon of gas was 18 cents cheaper nationally, AAA said.
And to make matters worse, relief doesn’t appear to be on the horizon, at least not in the short term.
Chevron CEO Mike Wirth predicted that oil prices would get “close” to $100 a barrel.
“Supply is tightening, inventories are drawing … the trends would suggest, we are certainly on our way, we are getting close (to $100/bbl),” Wirth, who heads the nation’s second largest energy producer, told Bloomberg TV on Monday.