According to figures published this Thursday by the United States Department of Commerce, consumer spending decreased for the second quarter at an annualized rate of 0.8%.
The data presented by the entity are less than the estimates given in the previous quarter which reached 1.7%, although the GDP had significant growth, reaching an annualized rate of 2.1%, consumer spending was shown weak and slow compared to last year.
The report comes a day after data was released regarding US consumer confidence, which fell to its lowest levels in September. For Dana Peterson, chief economist of the Conference Board, “consumers continued to be concerned about rising prices in general, and of food and gasoline in particular,” he said in a statement.
In the face of persistent inflation high, more than the Federal Reserve suggests, consumers are cautious, despite the fact that the inflation rate is showing signs of cooling after reaching 9.1% last year, it still weighs on the pockets of Americans who continue to struggle against high prices.
“Services inflation remains rigid”
Since the beginning of the year, Americans have reduced their spending, approximately 70 % of the country's economic production, although the Federal Reserve aims its strategies to reduce inflation while seeking to avoid a recession, consumers are spending less on goods and services, increasing their debts and reducing their savings.
In this regard, Claire Li, vice president of credit strategy and research at Moody's Investors Service, highlighted that “tighter budgets can prompt consumers to cut spending on discretionary services, especially because inflation of services continues to be rigid,” he indicated.
Although the second quarter covered the months from April to June, every month the Department of Commerce reports on consumer spending and although there were improvements in the month of July,Moody's Investors Service analysts predict that spending will continue to decline in the coming months.
For her part, the Conference Board's chief economist noted that currently “consumers also expressed concern about the political situation and higher interest rates. “The decline in consumer confidence was evident across all age groups, especially among consumers with household incomes of $50,000 or more,” he said.