Due to soaring prices in the U.S., individuals and companies are expected to reduce consumption and donations during year-end shopping seasons such as Christmas. Amid high levels of inflation, consumer sentiment has worsened more than ever as high-intensity tightening has cut off liquidity supply.
According to the Wall Street Journal (WSJ) on the 20th (local time), U.S. consumers and companies have reduced their plans to spend Christmas and other year-end gifts, donations, and events.
Citing the results of a consulting firm Deloitte survey, the WSJ predicted that the average number of consumers purchasing gifts at the end of this year, including Christmas, will be nine, down significantly from last year’s (16). The estimated total expenditure per household was $1,455, down from $1,463 a year earlier.
Thomas Tige, CEO of Direct Relief, an international non-profit organization that has donated $2 billion to medical institutions every year, said, “There is not much expectation for the end of this year’s donation season.”
Monthly inflation has risen at a rapid pace this year, overtaking wage growth, and high inflation has been longer than originally expected. Despite signs that the hot job market and inflation are slowing recently, the burden of living costs is making consumer nervous, according to the WSJ.
The Conference Board, a U.S. private economic research institute that releases monthly consumer confidence indexes, expects U.S. consumers to spend $618 on futures at the end of this year. This is a decrease from last year’s $648, which is not significant, but the number of products that can be bought at the same price is expected to decrease significantly due to soaring prices.
The conference board predicted that spending in the categories of furniture, home appliances, jewelry, equipment, and ornaments will decrease the most by item.
Essential spending can affect futures purchases for families below the middle class who are pressured by rising food, energy prices and housing prices. According to a survey of households conducted by the U.S. Census Bureau early last month, 41 percent of Americans (about 95 million) said they had difficulty meeting essential household expenses. This means that the pressure on spending has increased significantly compared to the previous year (29%).
In an August survey of 2,451 adults by the consumer financial statistics website Bankrate, 84 percent of year-end shoppers said they plan to cut consumption during inflation by using discount coupons, reducing their purchase lists, or finding cheaper brands.
As sluggish consumption is expected, large toy companies and fashion companies are planning large discount events to clean up their inventory. Gap, a U.S. fashion company, raised the discount to up to 60 percent.