Consumers are beginning to feel inflationary pressures as the country continues to see prices rise and incomes fall. The latest Resonate Recent Events Flash Study found that nearly 50 percent of respondents are feeling the pinch of inflation. When asked about the impact of growing inflation respondents noted three key reactions including with 49.2 percent saying they were getting by and able to pay for necessities, however, they reported having little money left over. 

More than 30 reported that “times are hard” and they are struggling to pay for necessities. Approximately 25 percent reported that they were living comfortably and were more than able to pay for their necessities with a reserve of cash. 

Americans are continuing to hold onto cash as the country grapples with the impact of inflation paired with a looming recession. Respondents said they are still able to put away some cash, with 51 percent saying they are able to save as much this month as they were 6 months ago. More than 35 percent of respondents said they were saving less than 6 months ago, while 13.3 percent said they were saving more. 

An unstable economy has kept shoppers at home with only 26 percent reporting they are spending more than they were 6 months ago. Consumers are also cutting back on big ticket items such as vacations, home improvements and buying a new vehicle. 

When it comes to discretionary spending, more than 46 percent are saying they are going out less as a way to save money. Switching to alternative brands is how 38 percent of consumers are saving money while 29 percent are using coupons. 

Predicting the future of consumer spending into 2023 remains a challenge. In his column, Forbes senior contributor Bill Conerly noted that stimulus checks were a driver of spending throughout the pandemic, but these are about to run out for many. 

“For the future expenditures of American consumers, the theory and data point to continued spending in 2022 and 2023. The money that families and individuals received in stimulus payments (including the extra unemployment insurance payments), will be spent over a period of several years. That’s the positive side,” he said. “On the negative side, the surge in durable goods spending in the last two years may reduce demand for durables in the coming years.”

He believes “in common sense terms,” everyone who might have bought a boat in 2023, for example, has already purchased one in 2020 or 2021.

“That seems logical, but supply constraints limited purchases of cars, boats, bicycles, appliances and most other types of durables. As supply becomes more available, some of the stimulus money will be spent,” he said. “Thus, expect spending on consumer durables to taper down gradually but not severely.”