American Consumers Have Lost $1 Trillion to Inflation
Fort Lauderdale, FL, March 22, 2023-"Ever since retail opened up after the pandemic, the National Retail Federation has gushed over the resiliency of the U.S. economy and the American consumer,” reports Unity Marketing.
“In a recent CNBC interview, NRF president and CEO Matthew Shay reported January retail sales were up 4.8% over last year, highlighting: ‘We have very resilient consumers and people are out their spending. In spite of what they know and concerns regarding inflation, they’re finding a way to get out and spend.’
“Resilient may be one way to describe American consumers, but perhaps that’s because they have no choice. They need to keep food on the table, heat their homes, and get back and forth to work, all of which costs significantly more than a few years ago.
“Tellingly, Shay said Americans keep spending ‘in spite of what they know’– a Freudian slip? But what they probably don’t know is that inflation alone cost them more than $1 trillion last year, according to Jitender Miglani, senior forecast analyst at Forrester.
“Actually, the number is $1.1 trillion or $1,100,000,000,000, but who’s counting?
“Overall services spending was the most impacted by inflation last year, totaling some $636 billion of additional expenditures for things like housing, utilities, food services, accommodations, health care, transportation and recreation.
“In the business of consumer goods that retailers rely upon, Americans paid $468 billion extra due to inflation. That pretty much accounts for nearly 90% of the $532 billion growth in retail, excluding food services, from 2021 to 2022, which rose from $6.6 trillion to $7.1 trillion.
“Digging deeper into the data, non-durable goods, like food, clothing, gasoline, household and personal care supplies-everyday consumable necessities that Americans purchase on an on-going basis-were most profoundly impacted by inflation, to the tune of $335 billion.
“Virtually all and then some of the extra expenditure in non-durables is accounted for by inflation.
“And there are other troubling signs of consumer burnout. The personal savings rate ended the year at about half of the 8.8% it averaged in 2019 and household debt was up 2.4% in the fourth quarter, some $2.75 trillion higher than at the end of 2019.
“Credit card balances alone increased $61 billion to $986 billion, in easy-hitting distance of $1 trillion and well over the pre-pandemic high of $927 billion.”