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Insider Intelligence: Inflation is still consumer's top concern in 2023

The insight: After a year of coping with rising prices and economic uncertainty, most consumers are looking to keep a lid on expenses and avoid unnecessary spending in 2023.

Roughly eight in 10 US adults think 2023 will be a year of economic difficulty, per a Gallup poll. Almost two-thirds (65%) think prices will rise at a high rate this year.

  • Forty-three percent of US consumers cited inflation’s impact on everyday expenses and saving as their top financial concern for 2023, per Fidelity Investments’ Financial Resolutions Survey.

  • More than half—56%—of US households plan to save money in 2023, per Kroger’s 84.51°. Financial goals were the second-most popular New Year’s resolution for 2023, per Numerator, up 6% compared with last year, as consumers try to reduce expenses and cut back on non-essential purchases.

A challenging year: While consumers were largely able to keep pace with inflation in 2022, 2023 could be a different story as persistent inflation takes its toll on spending power.

  • The personal saving rate (the percentage of disposable income that people save) fell sharply in 2022 to its lowest level since 2005, a sign of consumers’ diminishing ability to swallow price increases.

  • Stretched budgets will allow even less wiggle room for big-ticket items like electronics and jewelry, both of which saw sales fall during the 2022 holiday season, per Mastercard SpendingPulse data. And any excess funds are more likely to be funneled to services like travel and dining out over items like televisions and furniture.

Click here to read the full Insider Intelligence article.

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