American Consumers Curbed Spending on Both Necessities and Discretionary Activity as Inflation Surged in First Quarter
ACCC's Q1 2022 Financial Health Index finds travel and entertainment as well as grocery and fuel purchases have been cut back as violent conflict in Ukraine continues.
BOSTON, April 26, 2022 /PRNewswire-PRWeb/ -- As U.S. inflation worsened amidst the escalating crisis in Ukraine, consumers polled for the first American Consumer Credit Counseling Financial Health Index of 2022 said their household spending was being cut back in both critical and discretionary categories.
A third of those surveyed for ACCC's Q1 2022 Financial Health Index said they have cut back on entertainment spending, while 50 percent have postponed or modified travel and vacation plans. The impact from inflation - which reached 8.5 percent in March - also disrupted household spending on necessities, the survey found. More than 30 percent said they have cut spending on fuel, while 19 percent said they have trimmed their grocery budgets.
"This surge in costs across just about every category of consumer goods is a significant burden on American households," said Allen Amadin, President and CEO of American Consumer Credit Counseling. "Discretionary spending is generally the first thing to be curbed during times of financial crisis. When people are forced to buy fewer groceries or change their commuting habits, we have entered an entirely new level of challenge."
The acceleration of the U.S. inflation rate in March to 8.5 percent is the highest since December 1981, according to the U.S. Bureau of Labor Statistics. The cost of fuel oil rose more than 70 percent. Gasoline was up 48 percent. Food prices increased nearly 9 percent.
Overall, 93 percent of all respondents to the Financial Health Index survey said they were impacted in some way by this surge in costs for basic necessities. Confidence in the economy - on the heels of a roller coaster ride during the height of the COVID-19 pandemic - is also unsettled. Nearly 60 percent of those polled were either "not so confident" or "not confident at all" in the U.S. economy. ACCC's Q1 Financial Health Index surveyed 416 respondents aged 25-65 with incomes of $100,000 or less. It was conducted in March.
The Financial Health Index is also designed to closely monitor trends in household debt and the ability of consumers to reduce total debt. A bright spot: of those surveyed, 40 percent reported still being very confident they can pay down their debt by at least 10 percent in the next six months.
"It's a good sign that in difficult times with the cost of living rising so rapidly, many people are still doing what they can to prioritize debt reduction," said Katie Ross, Executive Vice President of American Consumer Credit Counseling.
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling, and financial education concerning debt solutions. To help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living, and retirement. Consumers can use ACCC's worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit http://www.consumercredit.com/financial-education.aspx
Media Contact
Valentina Mendez, American Consumer Credit Counseling, 1 617-646-1060, [email protected]
SOURCE American Consumer Credit Counseling
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