Are people ‘panic buying'? Economist explains which big purchases you may want to make now
As tariffs have been announced and then scaled back, many consumers are left unsure of what to do and tempted to make big purchases or stock their pantries now in case prices suddenly skyrocket.
'There's panic buying going on and panic selling by investors, too,' Gene Munster, managing partner at Deepwater Asset Management, told the New York Times. 'It's more turmoil than I've seen in 20 years following the company. The speed of it has been crazy.'
Panic buying is an emotional response to disaster or uncertainty, explained Tyler Schipper, associate professor of economics at the University of St. Thomas. It's often driven by a fear that there will be big price increases or shortages.
Home prices record first monthly drop since 2022: Redfin
'The last time people probably saw a lot of panic buying would have been during the pandemic when there wasn't enough hand sanitizer on the shelves. So when you saw it, then you bought four or five big things of sanitizer, and that led to a shortage of goods for the next person,' he said.
There may be a decent amount of panic buying going on, Schipper admitted, but finding data on it is hard. It's not easy to tell how many people are stocking up on stuff they don't need (which would be panic buying) or if people are just moving up purchases they would otherwise be making.
Automobile sales, for example, have accelerated since the Trump administration's tariff announcements.
'People have pretty clearly moved up buying cars because they're afraid about cars being more expensive in the future,' Schipper said. 'But in a lot of ways, I put that in a different category from panic buying. I think that's people being forward-looking and not wanting to face higher prices, versus going and buying 10 things of hairspray because you're worried about it being more expensive. I think that's in a different category.'
What is TikTok Shop, and where does all the stuff come from?
If you know you're going to need a new car or stroller or laundry machine soon, Schipper said it may make sense to buy it now. 'You know you're going to have need of a stroller, so you might move that purchase up because it's likely going to be more expensive once current inventory runs out.'
Fulfilling a known need is different than buying lots of new undershirts, toys or electronics in case you may need them later. Consumers should strongly consider their overall finances before stocking up, Schipper warned. Racking up credit card debt means you'll be paying more in interest for your panic buying, and you won't end up saving any money after all.
As some people go on spending sprees, others are pulling back on spending, nervous about the economy. Those two factors counteracted each other somewhat, the Commerce Department said this month. Retail and restaurant sales rose just 0.1% between March and April.
Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Los Angeles Times
29 minutes ago
- Los Angeles Times
California is too ‘overregulated, expensive, and risky' for Bed Bath & Beyond, chairman says
As Bed Bath & Beyond emerges from a bankruptcy that forced the closure of all its stores, the company's executive chairman took aim at California, saying he refuses to reopen locations in the state. 'California has created one of the most overregulated, expensive, and risky environments for businesses,' Beyond, Inc. executive chairman Marcus Lemonis said in a statement posted on X. 'It's a system that makes it harder to employ people, harder to keep doors open, and harder to deliver value to customers.' The home goods retailer, once common in strip malls and shopping centers, joins a handful of companies that have denounced California's business environment. Some executives say California's high taxes, high cost of living and stringent environmental regulations hinder businesses trying to thrive. Billionaire In-N-Out owner Lynsi Snyder announced her departure from California earlier this summer, saying that doing business and raising a family in the Golden State was 'not easy.' While In-N-Out's corporate headquarters will remain in the state, several high-profile firms have moved their headquarters out in recent years, including Chevron, Tesla, SpaceX and Charles Schwab. Economists say the state is still one of the world's premier tech hubs and has a lot to offer, including a range of industries and a vast talent pool. Still, more companies have been leaving the state than entering since 2015, Bureau of Labor Statistics data shows. After Lemonis disparaged California in his lengthy statement, Gov. Gavin Newsom's press office fired back on X. 'After their bankruptcy and closure of every store, like most Americans, we thought Bed, Bath & Beyond no longer existed,' the post said. 'We wish them well in their efforts to become relevant again.' Bed Bath & Beyond filed for bankruptcy in 2023, after several failed turnaround strategies left the company facing mounting debt. has since bought the company's assets and rebranded as Beyond, Inc. The revamped venture reopened its first store in Nashville earlier this month. Conservative commentator and California gubernatorial candidate Steve Hilton said on X he was 'disgusted' by Newsom's 'attack on job-creating businesses.' He recently described California as the 'most hostile business environment in the country.' Lemonis said his decision to keep Bed Bath & Beyond brick-and-mortar locations out of California wasn't about politics. The executive chairman has become a familiar presence on Fox Business Network and once guest-hosted 'The Celebrity Apprentice' alongside future president Donald Trump. California customers will be able to shop for Bed Bath & Beyond products online, Lemonis said.
CNBC
30 minutes ago
- CNBC
How wealthy investors use ETFs to skirt capital gains taxes. The strategy is 'like magic,' advisor says
After years of stock market growth, many investors are sitting on large profits in taxable accounts, which could trigger hefty capital gains when sold. That bill can be significant for wealthy Americans, with a 20% top capital gains rate, plus 3.8% net investment income tax, depending on earnings. One solution, known as a 351 conversion or exchange, allows higher earners to transform appreciated assets into shares of new exchange-traded funds. The strategy seeds ETFs before launch, and the original investor defers capital gains until selling their shares. For some investors, the strategy is "like magic," said certified financial planner David Haas, president of Cereus Financial Advisors in Franklin Lakes, New Jersey. Here's a look at other stories offering insight on ETFs for investors. One of the benefits of the ETF wrapper is that fund managers can accept assets before launch, and later rebalance without incurring gains. While the volume of 351 exchanges for ETFs has increased in recent years, there are still relatively few public options, experts say. Haas has used 351 conversions for certain clients. But there are some downsides to consider, he said. Here are the key things to know. Many higher earners keep some investments in separately managed accounts, or SMAs, which are taxable, customized portfolios with an active manager. One benefit of SMAs is tax-loss harvesting, which uses losses to offset portfolio gains. But those opportunities "dwindle over time" as assets grow, said Daniel Sotiroff, a senior analyst for Morningstar Research Services. Eventually, "there are fewer losses to harvest," and you can't change investments without incurring capital gains, he said. For some, 351 conversions to ETFs could solve the problem, he said. Large financial planning firms that manage clients' SMAs can create a private ETF via 351 conversions. More recently, smaller firms or SMAs can participate in publicly seeded ETFs. "I wouldn't be surprised if we see more," Sotiroff said. However, minimum investments are still high. For example, Alpha Architect recommends a "minimum portfolio" of $1 million. Cambria Funds' first 351 ETF conversion launch in December 2024 also had a $1 million minimum for individuals. While deferring capital gains taxes on embedded profits may be attractive, 351 conversions to ETFs have specific rules, experts say. "You can't just put one stock into a 351 exchange and get tax-deferred treatment," Ben Henry-Moreland, a CFP with advisor platform told CNBC. There are strict diversification requirements to qualify for deferred capital gains. Your transferred assets are only "diversified" if: Plus, certain assets, like mutual funds or alternative assets such as private equity or cryptocurrency, may not be permitted for the transfer, Henry-Moreland wrote of 351 exchanges in March. Before completing a 351 conversion, you should weigh the pros and cons and how it fits into your bigger financial plan. You're swapping assets in exchange for the ETF shares, which may be different from your target allocation. CFP Charles Sachs, chief investment officer of Imperio Wealth Advisors in Coral Gables, Florida, doesn't use the strategy because he said it could leave clients with fewer options. "You can do it, but you're stuck in there," Sachs said. While it's possible to transfer the funds via another 351 conversion, "there aren't many companies doing this," said Haas from Cereus Financial Advisors. And if you sell, you could see capital gains. "That's super important to think about," he said. "You have to be happy with the ETF."
CNBC
30 minutes ago
- CNBC
Doing these 5 key steps 'will allow you to move quickly' for a mortgage refinance, expert says
Mortgage rates have declined in recent months, and with the potential for a Federal Reserve rate cut this fall, it's smart for homeowners with high interest rates to start preparing for the opportunity to refinance, experts say. Last week, mortgage rates slightly edged higher. According to the Mortgage Bankers Association, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, increased to 6.68% from 6.67% for the week ending August 15. But generally, rates have been edging down, reaching a 10-month low earlier in August. Lower mortgage rates often result in lower borrowing costs for home loans. Many homeowners have already jumped on the opportunity in recent weeks. More from Personal Finance:What's keeping home buyers on the sidelinesMortgage rates have made a 'substantial improvement'Student loan forgiveness remains unavailable under this repayment plan The refinance share of mortgage activity last week decreased to 46.1% of total applications from 46.5% the week prior, according to MBA data. Whether the Fed cuts rates or not in September, it remains unclear how mortgage rates will react, according to Chen Zhao, lead of economics research at Redfin. While the federal funds rate influences borrowing costs for Americans, mortgage rates closely track the 10-year Treasury yields, which are sensitive to changes in the economy. Overall, experts say it's important for homeowners with higher-rate mortgages to start paying attention to interest rate movements, and preparing for opportunities to refinance. "Getting the preparation done beforehand will allow you to move quickly," said Keith Gumbinger, vice president of mortgage website HSH. Before you refinance, you want to make sure mortgage rates have "dropped sufficiently" for you to see real savings, Melissa Cohn, regional vice president of William Raveis Mortgage, recently told CNBC. There are different rules of thumb used to determine when rates have declined enough. According to Redfin's Zhao, homeowners should consider a refi if rates are at least 50 basis points lower than their current rate. Rates can change fast, so it's smart to know that target number and start preparing ahead of time, experts say. "If you're looking to refinance, especially in this type of interest rate climate, you need to be opportunistic, which means you probably need to move quickly," said Gumbinger. Here are five key steps to take: First pull your credit reports from all three bureaus — Equifax, Experian and TransUnion — to understand how information on them is influencing your credit score. You can request them from the major credit bureaus for free via Knowing this detail will help you get more accurate rate quotes from lenders, according to HSH. Unlike many other kinds of loans, with mortgages, lenders tend to look at scores from all three bureaus. If you notice any errors that could be inadvertently hurting your score, the sooner you fix them, the better, experts say. Reach out to the creditor as well as the credit reporting bureau, and explain the situation, said Gumbinger. However, it may take a bit of time to get the necessary parties involved and get the error fixed, he said. You want to protect your credit score as much as possible. Generally, the higher your credit score, the better terms and interest rates you qualify for. If you plan to refinance in the near future, avoid doing things that could hurt your score, like applying for new credit cards or other lines of credit, or making sudden, big purchases that you can't pay off quickly, and avoid making late payments. After checking your credit history, estimate how much equity you have in your home. If you have at least 20% equity in your home, you will get better loan terms from lenders, according to Bankrate. If you believe you'll benefit from a refi soon, HSH recommends gathering the following documents: You can also start putting aside funds to cover upfront costs associated with a refi, including an appraisal and credit reports. An appraisal fee can cost roughly $300 to $500, while a credit check fee is typically less than $30, according to Bankrate. There's an advantage beginning to research different lenders and what they offer before you actually want to refinance, because interest rates move pretty quickly, said Gumbinger. Rather than starting from scratch when you're ready to refi, gathering contact information and learning about different loans, rates and terms ahead of time can be helpful, experts say. "You don't have to actually contact the lenders, but you can do some advance research to speed things along," said Gumbinger. Once you know you're "actually ready to pull the trigger," then you can seriously shop around, said Cohn. Start with your existing lender, as they have a record history with you and may be able to offer a streamlined process, Gumbinger said. Once you shop around, you'll want to pick the lender that offers you the best terms, such as the lowest interest rate, experts say. You could even start getting on their contact lists and ask them to reach out to you once it's good for you to refinance, said Zhao. If you do refinance and interest rates happen to decline further, you can always repeat the process. Just make sure "there's a big enough gap to make it worthwhile," Gumbinger said.
