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Deloitte: Concern Around Rising Prices is not Fading and Likely Weighs on Americans' Sense of Financial Well-being

Roughly 7 in 10 Americans surveyed say they are still concerned about rising prices for everyday purchases, down only slightly from summer 2022 (83%) - when inflation peaked at 9.1%

Persistent price concerns amidst lingering inflation is a likely driver behind the recent plateau in Deloitte's consumer financial well-being index, which has generally moved inversely with inflation since 2020

NEW YORK, Feb. 22, 2024 /PRNewswire/ --

Key takeaways

Why this matters 
A consumer's sense of personal financial well-being likely forms the bedrock for spending behavior ? from their approach to budgeting, to what they buy at the grocery store, how they plan their vacations, and when they buy a car. In its fourth year, Deloitte's "ConsumerSignals" (formerly the Global State of the Consumer Tracker), a longitudinal consumer research study, explores shifts in global financial well-being sentiment and its potential impact on purchase decisions.  

Financial well-being sentiment has plateaued in the U.S. since early 2023
Unlike consumer confidence indices, which often focus on consumer opinion about business or labor market conditions, financial well-being focuses on the consumer's own financial situation, security and future expectations. Deloitte's Financial Well-being Index (FWBI) captures change across six dimensions of financial health: 1) ability to make upcoming payments, 2) comfort with level of savings, 3) income relative to spending, 4) delays in making large purchases, 5) assessment of current financial situation relative to the prior year, and 6) financial expectations for the year ahead.

Key quote 
"Despite low unemployment, GDP growth, and solid retail sales numbers, financial and geopolitical anxiety weigh heavily on the U.S. consumer's psyche. After navigating inflation for two-plus years, consumers' price expectations are moving slower than moderating inflation rates. Their intention to pull back on nondiscretionary items like groceries underscores the price fatigue and anxiety U.S. consumers feel. Business leaders should adjust their strategies to help rekindle profitable loyalty and volumes."

Stephen Rogers, managing director, Deloitte Consumer Industry Center, Deloitte Services LP

Americans still aren't thinking about spending like they did pre-inflation 
Inflation took a toll on spending confidence. Though rates have eased, Americans are likely still acclimating to the daily cost pressure. Deloitte's Spending Intentions Index measures changes in consumers' estimated spending for the month ahead across 16 categories. Stagnating financial well-being sentiment is one probable reason why spending intentions have not consistently returned to pre-inflation levels. While maintaining a slight uptrend since May 2023, spending intentions are still yet to fully recover.

Financial well-being following unique paths across the world
Deloitte's global financial well-being index, an average of eight of the top 10 global economies, suggests financial well-being has been faring better globally compared to the U.S. since the index's early pandemic April 2020 baseline. However, country-level trends vary. 

Key quote 
"On a global scale, consumers are mixed in how they view their financial well-being. However, we've seen a series of ebbs and flows in financial well-being since the pandemic, demonstrating consumers' ongoing resilience despite economic headwinds. A global pivot in spending intentions from goods to services shows consumers are still willing to spend differently, which presents new opportunities for business leaders in various sectors."

Leon Pieters, global consumer industry leader, Deloitte LLP

Deloitte's ConsumerSignals conducts a monthly survey of 20,000 consumers across 20 countries, presenting insights through interactive dashboards and articles. Along with Deloitte's financial well-being and spending intentions indices, ConsumerSignals includes sector-specific indices like the Vehicle Purchase Intent (VPI) and Food Frugality Index (FFI). These indices offer a comprehensive perspective on changing spending behaviors as global consumers adapt to an unpredictable world. The most recent survey, wave 51, was conducted from Jan. 25 to 31, 2024.

Connect with us on X at @DeloitteUS or on LinkedIn @StephenRogers and @LeonPieters.

About Deloitte
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world's most admired brands, including nearly 90% of the Fortune 500® and more than 8,500 U.S.-based private companies. At Deloitte, we strive to live our purpose of making an impact that matters by creating trust and confidence in a more equitable society. We leverage our unique blend of business acumen, command of technology, and strategic technology alliances to advise our clients across industries as they build their future. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Bringing more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte's approximately 457,000 people worldwide connect for impact at www.deloitte.com.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

SOURCE Deloitte

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