Consumer Spending Behavior Shifts as Two in Three Americans Say They are Extremely or Very Concerned About Inflation

Rhea-AI Summary

TransUnion's latest Consumer Pulse study reveals that 64% of Americans are highly concerned about inflation, prompting 62% to alter their purchasing behaviors. Specifically, 45% plan to cut back on discretionary spending. Despite this, 81% of respondents reported stable or rising household incomes in the past three months. The study also highlights a strong consumer credit performance amidst economic challenges, with 64% believing in the importance of monitoring their credit scores regularly. Overall, the findings indicate a shift in consumer spending priorities due to inflationary pressures.

Positive

• 81% of Americans reported stable or increasing household income over the last three months.
• 64% of consumers believe monitoring credit is important, showing awareness of financial health.
• Strong consumer credit performance and low unemployment rates indicate economic resilience.

Negative

• 64% of Americans are extremely or very concerned about inflation.
• 62% plan to change purchasing behavior, with 45% intending to reduce discretionary spending.

TransUnion’s Consumer Pulse study reports increase in plans to reduce discretionary spending

CHICAGO, March 02, 2022 (GLOBE NEWSWIRE) -- Two in three Americans (64%) report being extremely or very concerned about inflation, according to TransUnion’s (NYSE: TRU) latest Consumer Pulse study. Nine in 10 (93%) expressed that they are at least slightly concerned. The results from the Feb. 7-15 survey of 2,949 adults were released today, just weeks after the Consumer Price Index – a measure of inflation – experienced its largest 12-month increase in 40 years at the end January.

Six in 10 (62%) consumers say they are going to make changes to their purchasing behavior because of inflation. Of this group, 45% say they are going to decrease discretionary spending. In addition to inflation, grocery availability, new COVID-19 variants, product availability and rising interest rates rank as the top five concerns for Americans in 2022. While these rankings hold true for most generations, Gen Z is the only outlier with inflation ranked first, followed by COVID-19 variants, access to healthcare, grocery availability and rising interest rates.

Overall, in the next three months, more households reported plans to reduce rather than increase discretionary spending on dining out, travel and entertainment (37%), large purchases such as appliances and cars (30%) and retail shopping for clothing, electronics and durable goods (30%). At the same time, they plan to increase spending on paying bills and loans such as utilities and credit cards (34%), medical care (27%) and retirement funds/investing (26%).  

“It’s clear that inflation is impacting the way consumers spend their money. However, our findings show clear signs that many consumers are taking measures that will set them up for future success, such as paying down loans or increasing their investments,” said Charlie Wise, senior vice president and head of global research and consulting for TransUnion. “Despite inflation and other worries such as rising interest rates and supply chain woes, consumers are performing relatively well. Consumer credit performance continues to be strong and unemployment rates remain low.”

A sign that inflation hasn’t fully muted consumer optimism: most Americans (81%) reported that household income increased or stayed the same in the past three months compared to just 19% who experienced a decrease. And 91% expect household income to stay the same or increase in the next 12 months.

The Consumer Pulse study also found that consumers seeking to take control of their financial future look for credit information regularly. Most Americans (64%) believe monitoring credit is important and 63% report monitoring their credit at least monthly.  

Americans appear aware of the impact different data has on their credit score. In fact, 44% of people believe their credit score would increase if businesses used information not found on a standard credit report, like rental payments, short-term loan payments and buy now, pay later loans.  

“While there's no direct link between inflation and a person's credit score, rising interest rates could increase total loan costs. Plus, rising prices of goods could mean consumers are more reliant on credit products for their bills and day-to-day spending,” said Margaret Poe, head of consumer credit education at TransUnion. “When inflation increases, the usual advice for healthy credit holds: Make sure to keep your balances as low as you can and do your best to make your payments on time. If at any point you think you're at risk of missing a payment, contact your lender as soon as you can to explain your situation.”  

See TransUnion’s blog for tips on how to manage your credit if you're relying on credit cards more. The complete Consumer Pulse study can be viewed here.

About TransUnion (NYSE: TRU)

TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good®.

A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.
http://www.transunion.com/business

Contact	Dave Blumberg TransUnion
E-mail	david.blumberg@transunion.com
Telephone	312-972-6646

FAQ

What were the main findings of TransUnion's Consumer Pulse study regarding inflation concerns?

TransUnion's study revealed that 64% of Americans are extremely concerned about inflation, with 62% planning to change their purchasing behavior, including a significant number opting to cut discretionary spending.

How many consumers plan to reduce discretionary spending according to the Consumer Pulse study?

The Consumer Pulse study indicated that 45% of consumers plan to decrease their discretionary spending due to inflation concerns.

What percentage of Americans reported stable or increased household income in the last three months?

According to the study, 81% of Americans reported their household income either increased or remained the same in the past three months.

What is the significance of monitoring credit scores as per TransUnion's study?

TransUnion's study found that 64% of Americans believe monitoring their credit is important, highlighting consumer awareness of their financial health amidst inflation.

What percentage of consumers expect their household income to stay the same or increase over the next year?

91% of consumers expect their household income to remain stable or increase over the next 12 months.