As summer approaches, consumers are still spending less than in previous months, but travel expenses appear to be the exception.
Key Details
- Inflation cannot stop consumers from enjoying their vacations, according to recent data from Deloitte.
- Consumers are still worried about inflation and their lower-than-expected savings accounts, but spending on travel is still up.
- While many Americans have been hesitant to take on unexpected expenses while inflation and interest rates drive up costs, spending on experiences remains the exception.
Why it’s news
Summer is often a time of significant spending as consumers tend to put out more on gas, travel, and entertainment. The after-effects of COVID have tainted the last couple of summers, but this summer is starting to look like a return to normal.
The percentage of U.S. adults concerned about the economy has remained fairly consistent since the beginning of the year. In March, 38% of respondents were concerned about their personal finances, 33% were worried about the direction of the economy, and 20% were anxious about their job or employment situation.
However, concern about the level of savings accounts is still relatively high, though down from the same time last year. Around 47% of respondents reported concern about their savings compared to more than 50% last year. Fewer people expect their financial situation to worsen, with only 30% reporting a pessimistic outlook, according to Deloitte’s findings.
However, concerns about savings will likely continue to affect consumer spending. Consumer spending on durable goods declined for the second month in a row in March. Throughout the month, spending was relatively flat.
Despite this intention to save, spending on leisure travel appears to be unaffected. At the same time, spending on restaurants and entertainment is declining. However, the positive attitude toward leisure travel could signal growing consumer confidence.