Posted on 01/19/2023 1:43:10 PM PST by fluorescence
Consumer spending slowed and household finances weakened across all income levels last month. But households earning $100,000 a year or more reported shaving more off their spending than less well-off households did, according to a report released this week by Morning Consult, a decision intelligence company.
The report also found that real monthly spending among U.S. adults fell by 4.3% from November to December. Even so, 21.3% of U.S. adults said their monthly expenses exceeded their monthly income in December, up from 19.2% in November.
On average, households earning $100,000 a year or more said they spent about 10% less in real terms in December than they did the previous month. Households earning $50,000 to $99,999 and those earning less than $50,000 a year, meanwhile, reported that they cut their monthly spending bills by no more than 5% on average.
Across the board, households are cutting back on recreation, alcohol, vehicle insurance, and other services in December, while spending more on hotels, gas and airfares, the report found.
One theory on the spending cutbacks: Higher earners typically have more discretionary income, and likely have decided to exercise more fiscal caution after seven interest-rate hikes by the Federal Reserve last year. (On Wednesday, St. Louis Fed President James Bullard told The Wall Street Journal in a live-streamed interview that the Federal Reserve should not “stall” on raising its benchmark rates until they are above 5%.)
The Morning Consult report did cite inflationary pressures. “Heightened budgetary pressures brought on by persistently high inflation are forcing trade-offs for consumers, leading to reallocation across categories,” it said. “For instance, as food grew more expensive over the past year, U.S. households accommodated an increase in grocery purchases by spending less at restaurants.
(Excerpt) Read more at marketwatch.com ...
We live pretty comfortably but have been cutting back. I realized I don’t need to use as much cleaning products or could be happy without some of the conveniences I use to buy. There were never any tissues at the grocery store during lock down. So we used handkerchiefs. Now that stock is back, I don’t bother buying tissues.
They have more discretionary spending go cut…
Duh
I’m at the point where I want to get rid of stuff, not add more stuff.
What’s going on?
2 years of Biden if all else fails open eyes.
What? No parsley or sage?
“Across the board, households are cutting back on recreation, alcohol, vehicle insurance, and other services”
Pretty much checks out.
Recreation - already pretty low. Hiking is cheap. Our gym membership is also very inexpensive. Have cut back to eating out maybe once per week.
Alcohol - always looking for the best deal. Found relatively inexpensive Scotch that’s good enough and cheap bourbon that isn’t completely horrible. I make my own beer, but I always look for the least expensive ingredients. A case of craft beer for $25 and little time isn’t bad.
Vehicle insurance - priced that out last year. We can’t really adjust that.
Overall, yes we are cutting back on going out to eat, and we are looking for better deals on literally every expense. Our second freezer is getting eal use now. Gas and food are through the roof.
The store brand is often just as good and is cheaper.
Not to butt in here - but I'm going to butt in -
I would suggest garlic powder, basil, black pepper and ground rosemary powder.
Maybe some thyme also.
I'd have suggested oregano and/or basil...?
Because $100,000 is the new $35,000?
100k family of four is squeezed harder than any other group. They get no freebies from uncle sugar, they pay high property taxes to keep their kids out of crappy schools, they pay full pop for college, they actually pay medical debts because they have just enough assets to be afraid of bankruptcy but they don’t truly make enough to enjoy the restaurants, cars, and vacations of the 150-200k crowd. Ymmv based on location.
People I know who make much more than 100K are very aggressively saving.
Buy Nothing Project is a huge draw. It is surprising how nice the items are that are swapped. It cuts down on the amount of things bought, and those that are trashed.
It is counter cultural and I think, goes deeper than just saving. The movement to buy less is also a very doable rejection of the current system. It is not a Save the Planet moment as much as it is a screw the billionaires and the horses (politicians) they rode in on.
$100K is the new $50K
Your craft beer is much less than mine. A good IPA cost me at least $10.00 a six pack. But I don’t mind spending a couple of bucks extra if I get double the satisfaction than from a shitty Ying Yang lager!
Yields one gallon of pasta sauce for about 4 to 5 dollars. Any time you see gallon cans on sale, buy them up cheap. I make a Mexican version for my home made chili too. Just different spices.
Buy Nothing is incredible…….I have seen beautiful things offered…..I wish it was around when my kids were small.lots of toys and clothes offered.
.
WINNER!
I can’t tell you how much garbage we’ve assiduously culled in the past few years. I have been committed to not buying anything I don’t have an absolute need and use for. Sold a bunch of stuff on Craigslist, but I’m a little embarrassed with all the clutter/garbage I’ve put in the landfill. I’m done with it.
“Have you seen the price of Arugula lately?!”
Too strong for me.
But to each his own, of course...
How much is from the back end of the wealth effect. Take a look at the year end 401k and investment statements, say “Holy ****, we’re poor!” and cut back on spending.
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