Survey reveals consumers have economic worries

Consumers are feeling pessimistic about the economy, with possible ramifications for retailers.

According to an August survey of U.S. consumers from Numerator, 59% of respondents have a high level of concern regarding the economy, which is up from July 2023. Roughly two in three (65%) respondents said they feel as though the country is in an economic recession, and the same percentage think the U.S. economy will worsen in the next few months. 

Three in four respondents (76%) think inflation will increase in the next few months. In addition, during the next few months, more than three-quarters (77%) of respondents say rising prices on essential goods and services is a main economic concern (up five percentage points from July 2023), followed by rising prices on gas/fuel (70%, up nine percentage points month-over-month). 

Almost four in 10 (38%) respondents say personal finances will be a primary concern, with the same percentage citing retirement savings (down four percentage points month-over-month).Three in 10 (31%) will be concerned about government benefits scaling back (down three percentage points month-over-month).

Respondents are generally uncomfortable with discretionary spending. Almost three in four (73%) said they are uncomfortable splurging on premium items, 72% are uncomfortable taking money out of savings or retirement accounts, and 55% are uncomfortable spending money on non-essential items.  

In addition, in response to inflation and rising prices, respondents plan to cut spending on items such as dining out (43%) and travel (38%). However, 28% do not expect to cut back on spending.

Consumers scale back Labor Day

Economic concerns are also affecting consumer plans for the upcoming Labor Day holiday (Monday, Sept. 4). The recent “2023 Labor Day Intentions Preview” from Numerator reveals that 60% of surveyed U.S. consumers intend to celebrate Labor Day this year, down 20% from the 75% who planned to observe the holiday in 2022.

Inflation will have an impact on consumer Labor Day plans, as 42% of participating respondents expect rising prices to impact their Labor Day spending. A substantial 86% of participating respondents anticipate taking money-saving measures for the holiday, including buying items on sale (54%), preparing more budget-friendly meals (35%), using more coupons (32%), switching to store brands (23%), and visiting dollar or discount stores (20%).