Inflation fears force Americans to rethink financial choices: CNBC Survey

Surging inflation has Americans reconsidering how they spend their money.

The Consumer Price Index, which measures a wide-ranging basket of goods and services, jumped 7.9% in February from 12 months prior. Prices are going up on everything from the food you put on the table to the gas that powers your car.

That’s weighing heavily on people’s minds, with 48% thinking about rising prices all the time, according to a CNBC + Acorns Invest in You survey, conducted by Momentive. The online poll was conducted March 23-24 among a national sample of 3,953 adults.

Three-quarters are worried that higher prices will force them to rethink their financial choices in the coming months, the survey found.

Inflation is costing the average U.S. household an additional $296 per month, according to a Moody’s Analytics analysis. Experts expect it to get worse before it gets better.

Still, there hasn’t been a significant impact on consumer spending, although retail sales grew at a slower pace than expected in February.

The biggest area people have cut back on is dining out, with 53% saying they’ve done so, according to the survey. They are also driving less and canceling monthly subscriptions, among other things.

If higher prices persist, dining out, driving and trips or vacations are the top three areas Americans plan to cut back on even more.

To be sure, the past year has been difficult for many. Fully 52% said they are under more financial stress than a year ago. They are most concerned about gas prices, housing costs and food costs. In the last year, gas spiked 38%, shelter rose 4.7% and food prices increased 7.9%.

Meanwhile, a bulk of Americans are unhappy with the response from the White House, with 61% disapproving of the way President Joe Biden is handling inflation.

Recession fears

When will inflation slow?

Inflation was brought on by the pandemic, which scrambled supply chains and labor markets, and worsened by the Russian invasion of Ukraine, which impacted gas and food prices, Zandi explained.

“If that diagnosis is correct, as the pandemic fades and as we get the other side of the fallout of the Russian invasion, inflation should moderate,” he said.

Navigating higher prices

Grace Cary | Moment | Getty Images

https://www.cnbc.com/2022/04/05/inflation-fears-force-americans-to-rethink-financial-choices.html

Jinggo B Danuarta

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