Similarly, 48% of consumers are cutting back on dining out, and 31% are spending less on entertainment and recreation, according to a May First Insight Report.
The news: US inflation accelerated in June, and rising prices continue to force consumers to make hard choices about what they buy and when they buy it.
- The Consumer Price Index accelerated 1.3% month-over-month (MoM) in June and 9.1% year-over-year (YoY), the largest gain since the end of 1981, per the US Labor Department.
A tough environment: Inflation was broad-based with prices rising across nearly every area of the economy. For example, grocery prices rose 1.0% MoM, restaurant prices grew 1.0%, and apparel prices increased 0.8%.
- Core CPI, which strips out the volatile food and energy components, rose 0.7% MoM, and 5.9% YoY.
- Consumers' spending power is declining as real average hourly earnings for all employees decreased 1.0% MoM in June, and 3.6% YoY, per the Labor Department.
- The situation is causing consumers to pull back on some discretionary purchases. For example, US chocolate retail sales volumes are down 2% to 3% over the last couple of months as prices have risen in the "high single-digit, low double-digit" percentage range, according to Reuters.