Latest news with #AmericanConsumers
Yahoo
a day ago
- Business
- Yahoo
Sticker shock: Are American consumers learning to live with inflation?
American consumers may be learning to live with inflation. A long-running Gallup poll shows a steep drop in the share of Americans who name inflation as their biggest financial problem. Only 29% of consumers listed inflation as their top financial concern in April, down from 41% in April 2024. It's the lowest reading on the annual survey since 2021. Another recent survey, from the Ipsos Consumer Tracker, found fewer Americans think prices are rising. The share of consumers who said their household expenses are higher than a year ago slipped from 68% in February to 58% in May. Other surveys suggest, however, that inflation remains very much on consumers' minds. In a CBS News poll, taken in late May, 76% of Americans said their income wasn't keeping up with inflation. And a University of Michigan consumer survey, updated May 30, found that Americans expect prices to rise by 6.6% over the next year, twice the annual inflation rate they predicted a year ago. Economists say American consumers harbor complex feelings about inflation. On one hand, consumers have consistently cited rising prices as a top household concern, a sentiment that dates back to the dawn of the COVID-19-era inflation crisis in 2021. On the other hand, through four inflationary years, Americans have continued to spend. Consumer spending has risen steadily from 2021 through early 2025, despite rising prices. (Consumer spending slowed slightly in April, according to data released May 30.) 'We've had a remarkably robust consumer for the past 3 ½ years, when we've had a lot of inflation,' said Aditya Bhave, senior U.S. economist at Bank of America. Americans have had plenty of time to get used to inflation. The annual rate has hovered above 2% for every month since February 2021, federal data shows. The Federal Reserve sets 2% as its goal for a healthy inflation rate. The sky-high inflation of 2021 and 2022 is long gone. The annual rate hasn't topped 4% since early 2023. In April 2025, inflation registered at an unremarkable 2.3%. 'We don't have the super-high, 6%, 7% and 8% inflation numbers anymore,' said Yiming Ma, an associate professor at Columbia Business School. 'If you listen to the news, it's not as much about inflation anymore.' For much of this year, other financial worries have dominated the financial headlines: Tariffs. Turbulent stocks. Instability at Social Security, the IRS and other federal agencies. Potential Medicaid cuts. Many of those fears peaked in April, the month President Donald Trump rolled out sweeping import tariffs. 'There's a lot of moving parts that were affecting consumers attitudes toward the economy in April,' said Bill Adams, chief economist at Comerica Bank. Adams notes that Gallup polled consumers about financial worries in early April, just as the tariff drama was unfolding. Tariffs, of course, are widely presumed by economists to cause inflation. In the University of Michigan Surveys of Consumers, inflation fears spiked dramatically as the Trump administration pursued tariffs. In January, the average consumer expected prices to rise 3.3% in the next year. By May, the figure had risen to 6.6%. That data point, too, is complicated – and highly politicized. Democrats expect prices to rise by 8% over the next year, according to Michigan survey data from April. Republicans expect them to rise by 0.4%. The figures are three-month averages. The disparity suggests Democrats and Republicans occupy separate realities. Economists say it illustrates that one party expects Trump's economic policies to succeed, while the other expects them to fail. 'There's a huge amount of partisan influence when you see consumer sentiment,' Stephen Juneau, senior U.S. economist at Bank of America Securities, told USA TODAY in March. Americans seem largely united, however, in their disdain of higher prices. Consumer prices are about 24% higher now than in February 2020, at the dawn of the pandemic, Bankrate reports. 'The cumulative increase in prices over the last half-decade has been much higher than it was from 2015 to 2020,' said Adams of Comerica. 'And I think that is what has contributed to this sense of frustration about inflation among American consumers.' Before the current inflation outbreak, America had not experienced an inflation crisis in 40 years. The 8% annual inflation rate in 2022 was the highest figure recorded since 1981, according to Federal Reserve data. American consumers may have learned to live with inflation. Here's what it would take for them to forget about it, according to Adams and other economic experts: The Fed aims for a target of 2% annual inflation: A level so low that consumers tune it out. If the annual inflation rate reaches that range and stays there, the Fed reasons, most Americans won't notice it. 'I think you'd need an extended period of somewhat lower inflation, in the low 2s or high 1s, along with wages that are outpacing that inflation,' said Bhave of Bank of America. If inflation eases to 2%, the Fed's target rate, it might still take many months for consumers to adjust to permanently higher prices. 'It is not long ago that you can remember what eggs cost in 2021 or 2021, compared to now,' said Alex Jacquez, chief of policy and advocacy at the progressive Groundwork Collaborative. Consumer prices spiked dramatically in 2021 and 2022. Prices continued to rise in 2023 and 2024, but not so sharply. If inflation continues to cool, and wages continue to rise, Jacquez and other said, the day will come when prices no longer seem so high. 'I think we could see consumers adjusting to prices as they are today, if we see the rate of inflation going to where it used to be,' Adams said. 'But it'll take time.' This article originally appeared on USA TODAY: Are Americans learning to live with inflation? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Sticker shock: Are American consumers learning to live with inflation?
American consumers may be learning to live with inflation. A long-running Gallup poll shows a steep drop in the share of Americans who name inflation as their biggest financial problem. Only 29% of consumers listed inflation as their top financial concern in April, down from 41% in April 2024. It's the lowest reading on the annual survey since 2021. Another recent survey, from the Ipsos Consumer Tracker, found fewer Americans think prices are rising. The share of consumers who said their household expenses are higher than a year ago slipped from 68% in February to 58% in May. Other surveys suggest, however, that inflation remains very much on consumers' minds. In a CBS News poll, taken in late May, 76% of Americans said their income wasn't keeping up with inflation. And a University of Michigan consumer survey, updated May 30, found that Americans expect prices to rise by 6.6% over the next year, twice the annual inflation rate they predicted a year ago. Economists say American consumers harbor complex feelings about inflation. On one hand, consumers have consistently cited rising prices as a top household concern, a sentiment that dates back to the dawn of the COVID-19-era inflation crisis in 2021. On the other hand, through four inflationary years, Americans have continued to spend. Consumer spending has risen steadily from 2021 through early 2025, despite rising prices. (Consumer spending slowed slightly in April, according to data released May 30.) 'We've had a remarkably robust consumer for the past 3 ½ years, when we've had a lot of inflation,' said Aditya Bhave, senior U.S. economist at Bank of America. Americans have had plenty of time to get used to inflation. The annual rate has hovered above 2% for every month since February 2021, federal data shows. The Federal Reserve sets 2% as its goal for a healthy inflation rate. The sky-high inflation of 2021 and 2022 is long gone. The annual rate hasn't topped 4% since early 2023. In April 2025, inflation registered at an unremarkable 2.3%. 'We don't have the super-high, 6%, 7% and 8% inflation numbers anymore,' said Yiming Ma, an associate professor at Columbia Business School. 'If you listen to the news, it's not as much about inflation anymore.' For much of this year, other financial worries have dominated the financial headlines: Tariffs. Turbulent stocks. Instability at Social Security, the IRS and other federal agencies. Potential Medicaid cuts. Many of those fears peaked in April, the month President Donald Trump rolled out sweeping import tariffs. 'There's a lot of moving parts that were affecting consumers attitudes toward the economy in April,' said Bill Adams, chief economist at Comerica Bank. Adams notes that Gallup polled consumers about financial worries in early April, just as the tariff drama was unfolding. Tariffs, of course, are widely presumed by economists to cause inflation. In the University of Michigan Surveys of Consumers, inflation fears spiked dramatically as the Trump administration pursued tariffs. In January, the average consumer expected prices to rise 3.3% in the next year. By May, the figure had risen to 6.6%. That data point, too, is complicated – and highly politicized. Democrats expect prices to rise by 8% over the next year, according to Michigan survey data from April. Republicans expect them to rise by 0.4%. The figures are three-month averages. The disparity suggests Democrats and Republicans occupy separate realities. Economists say it illustrates that one party expects Trump's economic policies to succeed, while the other expects them to fail. 'There's a huge amount of partisan influence when you see consumer sentiment,' Stephen Juneau, senior U.S. economist at Bank of America Securities, told USA TODAY in March. Americans seem largely united, however, in their disdain of higher prices. Consumer prices are about 24% higher now than in February 2020, at the dawn of the pandemic, Bankrate reports. 'The cumulative increase in prices over the last half-decade has been much higher than it was from 2015 to 2020,' said Adams of Comerica. 'And I think that is what has contributed to this sense of frustration about inflation among American consumers.' Before the current inflation outbreak, America had not experienced an inflation crisis in 40 years. The 8% annual inflation rate in 2022 was the highest figure recorded since 1981, according to Federal Reserve data. American consumers may have learned to live with inflation. Here's what it would take for them to forget about it, according to Adams and other economic experts: The Fed aims for a target of 2% annual inflation: A level so low that consumers tune it out. If the annual inflation rate reaches that range and stays there, the Fed reasons, most Americans won't notice it. 'I think you'd need an extended period of somewhat lower inflation, in the low 2s or high 1s, along with wages that are outpacing that inflation,' said Bhave of Bank of America. If inflation eases to 2%, the Fed's target rate, it might still take many months for consumers to adjust to permanently higher prices. 'It is not long ago that you can remember what eggs cost in 2021 or 2021, compared to now,' said Alex Jacquez, chief of policy and advocacy at the progressive Groundwork Collaborative. Consumer prices spiked dramatically in 2021 and 2022. Prices continued to rise in 2023 and 2024, but not so sharply. If inflation continues to cool, and wages continue to rise, Jacquez and other said, the day will come when prices no longer seem so high. 'I think we could see consumers adjusting to prices as they are today, if we see the rate of inflation going to where it used to be,' Adams said. 'But it'll take time.' This article originally appeared on USA TODAY: Are Americans learning to live with inflation? Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
New York Times
3 days ago
- Business
- New York Times
‘Bellwether of Risks': What ‘Buy Now, Pay Later' Defaults Say About the Consumer
'Buy now, pay never' For months, economists have warned that consumers faced an affordability crunch, a prediction supported by a lousy first quarter G.D.P. report. Now, new data suggests that there's a credit crisis brewing: a rising number of defaults for 'buy now, pay later' loans, the typically zero-interest debt used for things like sneaker purchases and DoorDash deliveries. In the Biden era, the Consumer Financial Protection Bureau warned that pay-later customers would be especially vulnerable if the economy worsened, and called for measures to safeguard them. That's in jeopardy as President Trump has essentially tried to dismantle the watchdog, Grady McGregor reports. The context: Pay-later borrowing in the United States has soared rapidly, with American consumers taking out more than $75 billion worth of these loans in 2023. But as household finances deteriorate, buy-now-pay-never fears have grown; late payments were on the rise over the past year. Democrats on the Senate Banking Committee plan to intervene, some with knowledge of the matter told DealBook. Concerned about rising defaults, they intend to call for more oversight of pay-later lenders, including pushing for more robust reporting on their loan losses. The consumer bureau did not respond to a request for comment about the Democrats' plan. Pay-later lenders see no reason for alarm. That's despite Klarna, one of the biggest providers, reporting a 17 percent year-on-year rise in credit losses this month. The company — which paused its I.P.O. plans amid tariff-related market volatility — acknowledged that its losses were growing, but said that its default rate rose only marginally and represented a tiny share of its total loans. 'There's nothing troubling or worrisome from this data,' Clare Nordstrom, a spokeswoman, told DealBook. Want all of The Times? Subscribe.
Forbes
4 days ago
- Business
- Forbes
Travel Industry Fundamentals Remain Strong, Bucking Negative Headlines
The headlines haven't been too kind to the travel industry lately. You've probably seen the same bearish takes I have—reports of slumping business travel to the U.S., falling international visitor spending and weak demand. Context is everything, though, and if you dig a little deeper, you'll see a more nuanced, surprisingly bullish picture. In fact, there's a lot to like about the travel industry right now from an investment standpoint. You just have to know where to look. Let's start with one of the most time-tested indicators of travel health: Memorial Day. According to AAA, an estimated 45.1 million Americans were expected to travel at least 50 miles from home this holiday weekend. That's the highest number ever recorded, breaking a record that's stood since 2005. Despite inflationary pressures and economic uncertainty, American consumers continue to prioritize leisure travel. That's according to Allianz, whose latest survey found that 63% of U.S. households express confidence in taking a summer vacation, and projected spending is set to hit a record $226.6 billion, with the average household shelling out nearly $2,900 for their getaway. Deloitte also found that more than half of all Americans are planning leisure vacations this summer, with trip frequency on the rise. People may not feel wealthier, but they're still putting a premium on experiences and making time for family and travel. There's another tailwind worth highlighting: fuel prices. GasBuddy projects a national average of $3.08 per gallon for Memorial Day, the lowest since 2021 and the lowest adjusted for inflation since 2003. Over the course of the summer, prices could even drop below the $3 mark. That's good news for road trips and domestic leisure, which continues to represent a large portion of overall travel volume. Meanwhile, air travel is climbing back as well. AAA expects nearly 3.61 million air passengers this Memorial Day, a 2% bump from last year and 12% above pre-pandemic levels. Average domestic airfare is also up 2% year-over-year, suggesting steady demand. Let's address the elephant in the room: international inbound travel to the U.S. is underperforming. The World Travel & Tourism Council (WTTC) projects that the U.S. will lose $12.5 billion in international visitor spending in 2025, with total spending falling to just under $169 billion. Why? Some of it comes down to policy and perception. Reports of detentions and rigorous border checks have created concern among some foreign nationals. But from an investor's perspective, this isn't necessarily as damaging as it sounds. U.S. airlines and travel platforms still generate the majority of international revenue through domestic point-of-sale channels—in other words, Americans booking trips abroad. So while inbound traffic is down, outbound travel remains robust. If you want to see what strong travel demand looks like, look across the Atlantic. Ryanair, the largest airline in Europe by passenger volume, says it's seeing record demand across its network of 37 countries, with fares up in the mid-teens year-over-year. CEO Michael O'Leary said, 'The whole of Europe seems to be traveling,' and recent earnings support that view. Ryanair's fare outlook is 'far stronger than we had expected,' according to analysts at Bernstein, potentially putting the company on track to replicate the profitability of spring 2023. Higher fares could push Ryanair's stock higher U.S. Global Investors Demand for travel hasn't disappeared. It's just shifting geographically. Savvy investors can benefit from understanding where the action is moving. That brings us to the digital side of the travel business. Booking Holdings—the parent company of Priceline and OpenTable—was recently named IBD's Stock of the Day after posting 22% earnings per share (EPS) growth and 8% sales growth in Q1. What's key here is that Booking derives a majority of its revenue from Europe, giving it a natural advantage over U.S.-focused platforms like Expedia and Airbnb, which both flagged weakness in domestic travel. This divergence is worth watching. As American travel preferences shift toward regional and road-based trips, and international travel increasingly favors Europe over transatlantic routes, platforms with broad, diversified exposure may come out ahead. Another area that's sometimes overlooked, but increasingly important, is cruising. After a few tough years navigating pandemic-era restrictions and capacity limits, cruise lines are finally seeing smooth waters ahead. Passenger volume has surged, especially in the post-pandemic recovery years. In 2023, cruise lines carried 31.7 million passengers, and that number jumped to 34.6 million in 2024, according to Cruise Lines International Association (CLIA). Forecasts suggest another 9% increase in 2025, reaching 37.7 million passengers, with continued growth projected to hit 42 million by 2028. The third quarter, typically the high season for cruising, continues to be the industry's strongest sailing period. In Q3 2024, 8.7 million passengers sailed on CLIA-member cruises, surpassing all previous seasonal peaks. These gains reflect not only pent-up demand but also fleet expansions and strategic deployments of larger, high-capacity ships, especially in popular destinations. There's no denying that parts of the travel industry are under pressure. Business travel to the U.S. declined 9% in April compared to last year. But that's only part of the story. As I see it, the broader trend is one of resilience. Consumers are still traveling, and planes are still packed. They're just adjusting how and where they do it. And companies that are well-positioned in those areas—low-cost carriers in Europe, digital platforms with global exposure, airlines benefiting from lower fuel costs—stand to benefit.
The Independent
23-05-2025
- Automotive
- The Independent
French wine, German cars and Swiss chocolates: These EU imports could soon get more costly thanks to Trump's tariffs
President Donald Trump imposed a "straight" 50 percent tariff on goods from the European Union, a move that could have a massive impact on American consumers. The president accused the 27-member bloc of forming 'for the primary purpose of taking advantage of the United States on TRADE,' he wrote in a Truth Social post on Friday morning. Last year, the U.S. imported $605 billion from the E.U. while the E.U. imported $370 billion from the U.S., leading to a $235 billion trade deficit. Now, Trump announced a 50 percent tariff, noting the U.S.'s discussions with the E.U. are 'going nowhere.' The new sweeping levies are set to take effect on June 1. The announcement follows Trump's 10 percent 'reciprocal' tariffs for 90 days on the 27 nations in April. EU officials have not yet commented on the latest tariff threat. From French wine to Swiss chocolates, here is a look at some popular products that could soon become more expensive under Trump's E.U. tariffs: Pharmaceutical products The blanket tariff policy could mean that popular treatments — such as weight-loss drug Ozempic, blood thinner Eliqui and the HPV vaccine Gardasil — that are largely manufactured in Europe could be caught in the crosshairs of Trump's trade war. Last year, the U.S. spent $127 billion on pharmaceutical products imported from the E.U., according to U.S. International Trade Commission data. Cars Americans hoping to buy from German car manufacturers, including Volkswagen, Mercedes, and Audi, could soon be hit with higher price tags. It's unclear if the 50 percent tariff would replace or be in addition to the 25 percent levy Trump has already announced on cars outside of America. Volkswagen's 2025 Jetta Compact Sedan retails for $22,495. If the new 5o percent tax takes effect, Americans could see that figure rise as high as $33,742. Steel The U.S. imports billions of dollars in steel each year from the 27-member bloc. Trump already imposed a 25 percent levy on all steel imports. It's not immediately clear if that means the U.S. will put a 75 percent tax on steel imported from the E.U. French wine Some French wine lovers may soon want to say 'au revoir' to their favorite products. Many wines are imported from France and could get more expensive. A $55 of Veuve Clicquot, which makes its champagne in Reims, France, could soon go for $82 stateside - if makes pass the full cost of the tariff on to consumers. Hermes bags American consumers could soon see an uptick in prices in French designer brands, like Hermes. For example, the Hermes Lindy mini touch bag which currently sells for $13,100 could soon cost $19,650 - if the buy foots the tariff bill. Perfumes Smelling fresh could soon cost even more. Perfumes and essential oils are commonly imported products from the E.U. Perfumes are already expensive, but soon a $95 bottle of 'Grain de Soleil' from France-based perfume house Fragonard could cost $142 for Americans. Aircraft Aerospace giant Airbus has a massive factory in Toulouse, France. The aircraft maker's CEO has previously warned that if tariffs disrupt imports, Airbus would prioritize customers other than U.S.-based companies, such as American Airlines and Delta. "We have a large demand from the rest of the world, so [if] we face very significant difficulties to deliver to the U.S., we can also adapt by bringing forward deliveries to other customers which are very eager to get planes,' Airbus CEO Guillaume Faury told CNBC in February after Trump's initial tariff threat. Swiss chocolates account for part of the $1 billion in cocoa products that the U.S. imports from the E.U., data shows. The chocolatier Läderach, which has stores across the U.S., produces all of its chocolate in Switzerland. Under the new tariffs, a 15-piece box of chocolates that goes for $35 could soon retail for a whopping $52 - making Valentine's Day even more expensive.
