Latest news with #consumerSpending
Bloomberg
5 hours ago
- Business
- Bloomberg
Swedish Bankruptcy Rate Edges Higher in May Amid Consumer Gloom
The number of bankruptcies in Sweden continues to tick higher as the uncertainty surrounding tariffs weighs on consumers' willingness to spend. In May, 906 limited liability companies were declared bankrupt, up 3% from the same month a year ago, according to data compiled by credit reference agency Creditsafe i Sverige AB. The year-to-date figure of 4,616 bankruptcies is on par with last year's tally.
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
Globe and Mail
3 days ago
- Business
- Globe and Mail
U.S. consumer spending slows in April, inflation rises moderately
U.S. consumer spending increased marginally in April, with households opting to boost savings amid mounting economic uncertainty because of a constantly changing tariff landscape. The report from the Commerce Department on Friday suggested the economy struggled to rebound early in the second quarter after contracting in the January-March quarter for the first time in three years. Gross domestic product could, however, get a lift from a sharp contraction in the goods trade deficit last month as the front-running of imports to beat tariffs faded. Inflation was muted in April, with a measure of underlying price pressures posting its smallest annual increase in four years. A U.S. trade court on Wednesday blocked most of President Donald Trump's import duties from going into effect in a sweeping ruling that the president overstepped his authority. They were temporarily reinstated by a federal appeals court on Thursday, adding another layer of uncertainty over the economy's outlook. 'Consumers appeared to be saving for a rainy day last month as the Liberation Day tariff shock shook consumer confidence,' said Scott Anderson, chief U.S. economist at BMO Capital Markets. Consumer spending, which accounts for more than two-thirds of economic activity, rose 0.2 per cent last month after an unrevised 0.7 per cent jump in March, the Commerce Department's Bureau of Economic Analysis said. That was in line with economists' expectations. Spending was supported by outlays on services, mostly housing and utilities, health care as well as restaurants, hotels and motel stays. But goods spending softened amid cutbacks on purchases of motor vehicles and parts, clothing and footwear as well as recreational goods and vehicles. Pre-emptive buying of goods ahead of Trump's sweeping import tariffs helped to push spending higher in the prior month. Most of the tariffs have been implemented though higher duties on goods have been delayed until July. Duties on Chinese imports have been slashed to 30 per cent from 145 per cent until mid-August. Economists have argued that Trump's aggressive trade policy will sharply slow economic growth this year and boost inflation, concerns echoed by Federal Reserve officials. Minutes of the U.S. central bank's May 6-7 meeting published on Wednesday noted 'participants judged that downside risks to employment and economic activity and upside risks to inflation had risen, primarily reflecting the potential effects of tariff increases.' The U.S. central bank has kept its benchmark overnight interest rate in the 4.25 per cent to 4.50 per cent range since December. The economy contracted at a 0.2 per cent annualized rate in the first quarter after growing at a 2.4 per cent pace in the October-December quarter, largely depressed by a flood of imports. With most of the tariffs in place, imports are collapsing, helping to compress the goods trade deficit by 46 per cent to $87.6 billion in April, a separate report from the Commerce Department's Census Bureau showed. Goods imports decreased $68.4 billion to $276.1 billion. Exports of goods increased $6.3 billion to $188.5 billion. U.S. stocks opened lower. The dollar rose against a basket of currencies. U.S. Treasury yields edged higher. But given the on-again and off-again nature of the tariffs, the front-running of imports is probably not over, and neither is the gloom over the economy likely to lift soon, evident in the deterioration in consumer sentiment. That is prompting consumers to build savings. The saving rate jumped to a one-year high of 4.9 per cent from 4.3 per cent in March. Inflation was benign in April, with retailers likely still selling inventory accumulated before the tariffs. The Personal Consumption Expenditures (PCE) Price Index rose 0.1 per cent last month after being unchanged in March, the BEA said. In the 12 months through April, PCE prices increased 2.1 per cent after advancing 2.3 per cent in March. Stripping out the volatile food and energy components, the PCE price index gained 0.1 per cent last month following an upwardly revised 0.1 per cent gain in March. The so-called core PCE inflation was previously reported to have been unchanged in March. In the 12 months through April, core inflation rose 2.5 per cent. That was the smallest advance since March 2021 and followed a 2.7 per cent increase in March. The Fed tracks the PCE price measures for its 2 per cent inflation target. Economists expect inflation to accelerate this year as tariffs raise goods prices. Consumers' one-year inflation expectations have soared. The Fed minutes on Wednesday showed some policymakers assessed that the surge in short-term inflation expectations 'could make firms more willing to raise prices.' They also saw a risk that longer-term inflation expectations 'could drift upward, which could put additional upward pressure on inflation.'
CNN
3 days ago
- Business
- CNN
Americans pulled back on their spending in April amid tariff rollout
American consumers reined in their spending in April following a tariff-fueled buying binge the month before, according to new data released Friday that also showed inflation cooled off again. Friday's report from the Commerce Department showed that consumer spending rose 0.2% last month, a weaker-than-anticipated reading but a notable retreat from March's 0.7% surge when Americans front-loaded purchases — notably new cars — ahead of potential price increases from President Donald Trump's tariffs. The latest data also showed inflation moving closer to the Federal Reserve's target of 2%, almost where it was before the tariffs rollout. The Personal Consumption Expenditures price index was 2.1% for the 12 months ended in April, a slowdown from the 2.3% annual gain in March. On a monthly basis, prices rose 0.1%, a slight acceleration after holding steady in March. Economists were expecting the PCE price index to rise 0.2% from March and to ease to an annual rate of 2.2%, and for spending to slow to 0.4%, according to FactSet. This story is developing and will be updated.
