Spending

Consumer spending increases in Arizona and the United States

TUCSON, Ariz. (KGUN) — Inflation in the United States soared to 7.5% in January. Groceries, gas and electricity are all more expensive than usual. But rising costs haven’t stopped consumers.

“It’s not a drastic amount of money, it’s just enough for you to notice,” said Tucson resident Chuck Crowley.

Tucson business owners have hiked prices in recent months due to supply chain issues and inflation.

“We love going out to eat and we’re not going to give up on that part of our lifestyle,” Crowley said.

“Certainly about a dollar and a quarter on most things to try to offset food costs,” said Mark Meabon, co-owner of Serial Grillers at Speedway.

He says that despite higher costs, some Serial Grillers locations have seen a 10% increase in customer base this year.

“Certainly since the beginning of January things have changed dramatically,” Meabon said. “People are feeling a bit more comfortable going out to eat, which is nice because it’s been a while.”

It’s not just in Tucson. More and more people are spending money in the United States. According to the US Bureau of Labor Statistics, consumer spending rose 2.1% in January.

That’s a jump from the 0.8% decline in December.

“During the pandemic, we just weren’t spending on travel and tourism-related services the way we normally would,” said Dr. George Hammond, director of the Center for Economics and Business Research at the University of Arizona. “So that left more money in many individuals’ and households’ bank accounts and now they’re spending it.

Hammond attributes this trend to a number of changes.

“Part of the reason is that individuals’ incomes are high,” Hammond said. “We had a huge injection of federal income support during the pandemic, and that only recently subsided.”

Hammond says the trend may not continue for long. High costs will soon weigh on consumers’ wallets.

“Rising prices will offset some of the increased spending as it eats away at household budgets,” Hammond said.

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