American consumers "tighten their belts" under cost pressure

VTV.vn - Household finances are deteriorating, essential expenses take up almost all income, causing consumption to slow down even though inflation has cooled down.

People shop at a supermarket in Foster, California, USA. (Photo: THX/VNA)

A worrying trend in the US is that the financial sentiment of American households is showing signs of weakening. Just before the Fed meeting, the New York Federal Reserve Bank (New York Fed) released data on household finances. The situation has worsened significantly compared to a year ago, even as inflation is trending down.

Reuters news site quoted this report with the comment: US households felt more pessimistic about their current and future financial situation in November, although their expectations about inflation in the coming time remained almost unchanged.

The New York Fed report shows that while just over 16% of respondents felt financially pretty bad a year ago, and over 4% felt really bad, this year the figures are 24.8% and 6.6% respectively. In addition, access to credit is more difficult and the rate of late minimum debt payments has increased.

Barron's pointed out the discrepancy between actual consumer spending and the improving macroeconomic situation. The job market has improved slightly, and inflation is not as worrying as it was at the beginning of the year.

This prolonged trend will influence shopping behavior, consumer confidence, and even change the habits of Americans.

Fox Business news site cited a report by Bank of America saying that 1/4 of American households will be classified as living paycheck to paycheck in 2025. More than 95% of income is spent on essential needs such as housing, food, gasoline, electricity and water... Therefore, they have almost no surplus left to save, or spend on discretionary purchases.

AP news site quoted the chief economist of investment bank Jefferies. Accordingly, consumer spending will not immediately plunge, but this slowdown is increasing.

Overall, Americans are spending less despite lower prices. Not to mention access to credit is more difficult. This will put great pressure on US consumer growth from now until next year. The Fed will probably not hesitate to decide on interest rates at its last meeting of the year.

Source: https://vtv.vn/nguoi-tieu-dung-my-that-lung-buoc-bung-truc-suc-ep-chi-phi-100251210094016444.htm