According to a new Bankrate survey of 2,500 adults, American consumers are putting the brakes on their spending habits. After all, they are responding to the new normal of economic uncertainty. Conducted between April 3 and April 23, the survey revealed that many individuals are delaying purchases and seeking ways to save as they grapple with the effects of inflation and the lingering impact of the COVID-19 pandemic. That turbulent period included former President Trump’s announcement of new tariffs on April 2, which coincided with the end of our survey period. This happened right before the latest thaw in the US-China trade war.
The survey results support this concern. 68% of respondents reported being unwilling to accept new credit. This hesitancy speaks to a more deliberative approach to the use of public dollars, perhaps due to the current economic climate. Many Americans have emerged from the pandemic with a heightened awareness of their financial situations, prompting them to rethink their spending habits.
“They’re obviously trying to find places to cut,” said Matt Kramer, a bond market analyst. Consumers have joined the sustainability movement, forcing them to weigh the impact of spending. According to Kramer, individuals are “switching providers where it makes sense, whether that’s their streaming services, whether it’s looking at insurance providers.”
The past three years have left many Americans scarred from combat, as they dealt with months of unemployment and economic uncertainty. Consequently, they’re more often willing to embrace what Kramer calls “spend-smart initiatives.” He stressed that consumers are quickly changing their financial plans. They are looking for the big ticket items and definitely shopping around and searching to save money.
Along with other findings, the survey highlights generative artificial intelligence (GenAI)’s impact on consumers’ lives. And surprisingly, 45% of respondents admitted GenAI already has a huge impact on their personal and work lives. This number is up from 41% and 40% respectively from last year. These smart technology innovations are changing the ways we make decisions, improving efficiency and security across all areas of everyday life.
Not just one-third, but half of the respondents said that a postsecondary degree is no longer necessary to land a good-paying job. This change is indicative of changing attitudes towards education and the implications it has for individuals’ ability to obtain stable livelihoods in an increasingly competitive workforce.
Kramer remarked on the challenges faced by consumers during the transition from the pandemic. “I think it took a little bit long the last cycle where they just weren’t quite used to making those major adjustments.” He noted that individuals are now more adept at making necessary changes due to rising costs and fluctuating economic conditions.