Inflation Means Americans Now Spend $64B More on Essentials

The United States is entering month 18 of the inflation crisis — and the toll it is taking on consumers’ finances is high. Consumers across the country spent a collective $64 billion more on just the bare essentials in Q3 2021 than they did in Q1 2022, underscoring how drastically the ongoing crisis has increased the cost of living.

With so much more of their hard-earned cash going to the bare basics, millions of consumers see no choice but to cut back on everything else and fast.

In “Consumer Inflation Sentiment: Consumers Buckle Down On Belt Tightening,” PYMNTS returns to the field to learn the latest on how consumers are changing their spending habits to adjust to soaring prices. We surveyed a census-balanced panel of 2,632 consumers about their economic outlook and purchasing behavior.

Key findings from our research include the following:

• Most U.S. consumers are reducing nonessential spend — even the few who say their incomes have kept pace with inflation. The retail sector is taking the brunt of consumers’ belt-tightening, with 66% of all retail shoppers saying they are cutting back on nonessential purchases to save money.

• Consumers are growing more pessimistic about the future of the U.S. economy. The average consumer expects the inflation crisis to continue until April 2024, and 67% now say they are very or extremely concerned about the economy’s future – up from 65% who said the same one month prior.

• The average U.S. household now spends 65.4% of its total income on essential purchases. This works out to a collective $64 billion more being spent on essential purchases now than in the beginning of the year.

These are only some highlights of PYMNTS’ latest survey into the ways in which consumers are adjusting their spending according to the new financial realities of life in the United States. “Consumer Inflation Sentiment: Consumers Buckle Down On Belt-Tightening” provides the details of how soaring prices are forcing millions to reassess the way they shop, pay and live.

To learn more about how the ongoing inflation crisis is impacting consumer behavior, download the report.