Chart of the Day: Americans Adjust to the Inflation Reality Will it Become Structural?
After last months 8.5% inflation YoY report, even though high, believe it or not, it is beginning to cool. The cooling of inflation in July was mainly caused by a significant drop in energy prices, offsetting further price increases for food and shelter. Regardless of the move in the right direction, prices remain elevated, with energy prices 33% above last years levels and food prices 11% higher than in July 2021. As millions of families face financial hardship in the face of inflation, many are forced to cut back on some expenses to make ends meet. According to data from Statistas Global Consumer Survey, just 6% of US adults polled in July said that they werent planning to save money to counter inflation and high energy costs. Meanwhile, two-thirds of respondents said they were going to cut back on current contracts and subscriptions in order to save some money, possibly spelling trouble for companies like Netflix, whose services many cash-strapped Americans might consider non-essential. Cutting back on clothing purchases and bar-restaurant visits is also part of many Americans plans, while just a small share plan to reduce their spending on insurance and education. See this in the chart below and learn more here. In general, it looks as if the nice to have items are getting chopped from many Americans budgets. The question one could ask is whether the decline in these inflation-fighting sales will become structural in the economy. If they do, growth rates will fall, and so will many Americans standard of living for the future. Lets look at a few key industry sectors to see what future trends show us and whether they will recover from pre-Covid levels. In terms of the trends in US subscription e-commerce sales, after the Covid spike due to lockdowns, the growth rates are falling below pre-Covid levels. See this in the chart below and learn more here. The fast food industrys size was valued at over USD 500 billion in 2019. Quick service restaurants and fast food restaurants have evolved as major providers of this mass-produced food, which has been attracting an increasing number of people to experience and enjoy their services. However, fast food has yet to recover to pre-pandemic levels and probably wont until 2025. See this in the chart below and learn more here. Covid appears to be fading as a primary daily concern. Return-to-office is expected to accelerate this spring, making it easier to ask employees to travel and easier to set up in-person client meetings. The spring 2022 season of live industry events, without the specter of concerning Covid variants, should reap better attendance than in fall 2021. Still, corporate travel is not expected to snap back to pre-pandemic levels this year or even reach that milestone in 2023 see this in the chart below and learn more here. The takeaway from these charts is that not only are Americans cutting back on nice to haves to reduce the impact of inflation, but it also looks to be structural and will take years (if ever) to recover in many industry sectors. This is part of the continuing stagnant or negative global economic growth story that has been brought on by our unfortunate poor leaders and their economic policies. See more Chart of the Day posts. If you found this article informative, please consider a small donation to our coffee cup to help support Conservative Journalism or spread the word. Thank you. RWR original article syndication source.
Tuesday, August 16, 2022 at 5:32 am