Consumers Skeptical of Government’s Inflation Optimism

The Bureau of Labor Statistics (BLS) has reported that inflation seems to be cooling, with price increases for fresh meat and vegetables slowing since Q2 2022 — but consumers aren’t buying it. There is a disconnect between the inflation data reported by the government and what consumers say they now pay for necessities, which is currently driving consumer behavior.

In “Consumer Inflation Sentiment: Perception Is Reality,” we surveyed 2,140 United States consumers to better understand their perceptions of the current economic situation and how it changes how they shop, eat and live their lives.

Key findings from the report include the following:

• Most consumers compensate for tighter food budgets by buying fewer things, but many millennials and families with children are also switching to cheaper, lower-quality alternatives.

Overall, inflation has altered 69% of consumers’ shopping lists. Fifty-nine percent of surveyed grocery shoppers who say they have noticed price changes have cut down on nonessential grocery items, while 35% are buying cheaper alternatives.

• Consumers who live paycheck to paycheck tend to be even more skeptical of lower reported inflationary rates and to make deeper spending cuts.

Consumers who live paycheck to paycheck with issues paying bills reported a perceived 27% increase in grocery prices, as opposed to 17% among consumers who do not live paycheck to paycheck. The BLS reports an 11% increase.

At 67%, paycheck-to-paycheck consumers who say they struggle financially were more likely to cut back on nonessential items in response to higher prices, compared to 61% of non-struggling paycheck-to-paycheck consumers and 47% of consumers who do not live paycheck to paycheck.

To learn more about how consumers see this inflationary period, download the report.