As Inflation Surges, Even High-Income Consumers Are Cutting Back
April 7, 2022
Inflation typically hits lower-income households the hardest, but as prices surge at the fastest pace in 40 years, even high earning households are reining in their spending.
A recent survey from CNBC and Momentive found that Americans with a household income of at least $100,000 say they have cut back on spending, or plan to do so soon, at about the same rate as households with lower incomes. In some categories, like dining out or purchasing a car, high-income households are more likely to cut back, and that could have a big impact on the economy.
While households with an income above $100,000 account for just 30% of all consumers, they are responsible for nearly 75% of all spending, so a slowdown in their spending would be an outsized drag on the economy.
The survey also found high levels of financial anxiety and worry for the future among all income groups. Among low-income households, those making less than $50,000 per year, 57% said they are under more financial stress today than a year ago, while 45% of those with incomes above $100,000 feel the same. The survey also found that 68% of high-income consumers say they are worried higher prices will force them to rethink financial decisions. While this is significantly lower than the 82% of Americans with incomes of $50,000 or less who say the same, it is still a majority.