While inflation is easing, many consumers still believe that the costs of everyday items are on the rise. Such consumers also report that their income has not matched inflation. As a result, they are buying cheaper or lesser-quality alternatives, if they’re buying at all. This is especially true for those living paycheck-to-paycheck.
Those are the major conclusions of a recent study on consumer behavior by Pymnts, which gathered insights from nearly 2600 U.S. consumers in July and also factored in an analysis of other economic data.
“Despite decreases in inflation rates, consumers continue to perceive that the cost of everyday essentials, including groceries and retail products, are on the rise,” the report notes. “This is especially true among struggling paycheck-to-paycheck consumers. In addition, 7 in 10 consumers believe that their income has not matched inflation. As a result, from groceries to retail, many consumers are trading down. If they’re buying at all, many are buying cheaper or lesser-quality alternatives.”
Since July 2023, the study notes, the share of consumers living paycheck to paycheck with issues paying their monthly bills has increased 2 percentage points to a high of 23%. The share of consumers who struggle to pay their monthly bills has also been steadily rising since February.
Meanwhile, the share of consumers living paycheck to paycheck without issues paying their monthly bills is currently 40% — the same as July 2023 but a notable drop from 44% in May 2024. “This volatility suggests that consumers at the edges of each financial lifestyle may move between back and forth between them,” the study notes.
Click here to register to see the full Pymnts study.
Advertisement
