82% of Consumers Worry About Prices Despite Inflation Relief

The price of essentials may be rising at a slower pace than last year, but consumers remain cautious.

Inflation for everyday items is nearing price rise rates similar to the discretionary item price slowdown earlier this year that led the initial overall inflation decline. The Bureau of Labor Statistics Thursday (Aug. 10) Consumer Price Index release noted prices rose only 0.2% month over month. And while that may be enough for the Federal Reserve to consider pausing the next interest rate hike, any price growth still means the cost of essentials, such as groceries, is going up.

As detailed in proprietary research created for the PYMNTS’ July “Consumer Inflation Sentiment Report,” consumers remain concerned about price increases.

Price increases are the top worry cited by consumers who are least somewhat concerned about the economy. With 83% of surveyed consumers agreeing with the sentiment, the response is almost double the second-most popular response: difficulty paying monthly bills.

Across demographics, consumers cited higher prices as their top concern. Ninety-one percent of baby boomers and seniors cited the reason as their highest concern. The lowest response rate across generations agreeing with the statement was 73% by bridge millennials.

There was little variation across income brackets in the shares of consumers citing higher prices as their top concern about the economy. Eighty percent of consumers earning over $100,000 annually agreed with the sentiment, as did 85% of those earning between $50,000 and $100,000 and 83% of those earning under $50,000 per year. As consumer perceptions tend to be consistent without extreme price fluctuations in either direction, consumers may continue to carry on with their budget-tightening behavior until given a more significant reason to change.

Grocers are noticing this trend as consumers continue to stick to the basics or trade down.

“In terms of consumer sentiment, inflation is right up top as far as their concerns for the economy, so this still is a very significant issue for them,” Alex Weinstein, chief digital officer of online grocer Hungryroot, told PYMNTS in a July interview.

Consumer concerns over rising prices may be especially well-founded and may become more stark considering the current wage slowdown. Until and unless these prices see stronger relief or even decrease, consumers may continue to focus on costs above all other considerations.