Americans Are Concerned About Economy, but Consumer Spending Remains Strong
According to a recent report from Intuit Credit Karma, nearly all Americans, 96%, are concerned about the current state of the economy. However, despite their worries, more than a quarter are still spending money, a practice referred to as “doom spending.”
Record Number of Shoppers Turn Out for Black Friday and Cyber Monday
The report of the 200 million shoppers turning out between Black Friday and Cyber Monday was confirmed by the National Retail Federation. This season, holiday spending is expected to reach record levels, totaling up to $966.6 billion.
Economic Challenges and Shopping Behavior
Courtney Alev, Credit Karma’s consumer financial advocate, stated, “Much like doom scrolling, we’re seeing people mindlessly shop to soothe concerns about the economy and foreign affairs.” She also warned that this mindset could take a toll on their financial wellbeing.
Credit Card Debt and Younger Generations
The report also highlighted that, despite credit card debt topping $1 trillion, Gen Z and millennials appear particularly susceptible to mindless spending. Both generations have expressed a preference for living in the moment over cutting expenses.
Gen Z Workers Lack Savings
Ted Rossman, senior industry analyst at Bankrate, acknowledged that younger adults feel discouraged, but highlighted that they have the advantage of time. Yet, Gen Z workers are the biggest cohort of nonsavers. To address this, Rossman advised automating a portion of income towards savings and balancing it with some fun activities, to avoid paying high credit card interest.
Impact of High Inflation and Cost of Living
Over half of Gen Z workers have cited the increased cost of living as a barrier to their financial success. High inflation has especially made it hard for those just starting out.
Economic Resilience and Holiday Spending
Despite economic headwinds and budgetary constraints posed by inflation, consumers are proving remarkably resilient in terms of spending. This was evident as record numbers of shoppers turned out for Black Friday and Cyber Monday.
Conclusion
While expressing significant concern about the economy, Americans are still actively participating in shopping and spending activities. Worries about inflation, interest rates and geopolitical concerns are not stopping many consumers from shopping as they seek to cope with their financial concerns.
Through the juxtaposition of individual shopping behaviors and broader economic trends, these reports provide a valuable insight into the current financial landscape in the United States.
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