It appears that hyperinflation has already taken its toll on consumer spending, with personal consumption expenditures rising just 0.1% in July.
And things don’t look too hot in the holiday shopping season. A total of 55% of consumers said inflation will affect their vacation spending this year, according to a survey of 1,025 people from Jungle Scout, a platform for merchants to sell on Amazon.
Among those whose spending will be affected,
54% expect to spend less on gifts per person,
47% expect to buy discounted products,
38% expect to reduce the number of people giving gifts to them,
36% expect to spend less on holiday decorating,
34% expect to reduce holiday/travel activities,
25% expect to buy gifts from second hand/second hand stores
21% expect to give back/recycle gifts.
Who is being cheated?
Among the consumers who plan to remove recipients from their gift list, the most likely to receive the ax are:
1. Self
2. Friends
3. Extended family
4. Co-workers
5. Neighbors.
Less likely to cut are:
1. Children
2. Grandchildren
3. Partner / Spouse
4. Grandparents
5. Pets.
Regarding the shopping schedule, 19% of respondents said they had already started holiday shopping when the survey was conducted in August. And 70% expect to start before Thanksgiving, up from 55% who made that plan a year ago.
There is a wider picture
Looking beyond just holiday spending, 84% of consumers said inflation affected their spending, up from 77% in the second quarter. And 76% said they make less pleasurable/impulsive purchases, up from 72% in the second quarter.
A total of 37% of consumers said their spending fell this quarter, 36% said it stayed the same, and 37% said it increased.
The main categories in which consumers said they were cutting back on spending were:
1. Eating out in restaurants/bars
2. Leisure travel
3. Personal entertainment (movies, concerts, etc.)
4. Entertainment Streaming Subscriptions (Netflix, iTunes, Audible, etc.)
5. Subscription services (meal kits, food delivery, etc.)
6. Personal care services (hair/nail salons, spas, etc.)
7. Clothes/Accessories
8. Grocery
9. Home improvement / decorating.
In other surveys, Americans lost $6.9 billion to online fraud in 2021, up from $3.5 billion in 2019, according to a study from Social Catfish, an online dating investigation service.
The amount lost has nearly doubled since the global pandemic began in 2020, “as people have been forced to work, shop and date online. … scammers have become more sophisticated to take advantage of” in the report.
This alarming trend is showing no signs of slowing, as an unprecedented number of victims lose their savings, with many of them tragically killed. Moreover, the vast majority of victims are too humiliated to come forward.”
The number of victims of online fraud more than doubled to 847,376 last year from 467,361 in 2019.
