More than half of Americans are dipping into their savings, borrowing money or going into debt just to cover expenses, according to data from the National Retail Federation (NRF).
Consumers are facing rising costs across all categories, from daily necessities to groceries and gasoline “as we continue to face the highest rate of inflation in decades”, according to the country’s largest retail group.
In a recent survey conducted by the NRF47% of consumers said they opted for cheaper alternatives when looking for basic necessities as they tried to navigate a tough economic environment.
INFLATION REACHES NEW 40-YEAR HIGH IN MAY WITH CONSUMER PRICES UP 8.6%
Just under half of respondents, or 45% of consumers, search for coupons or sales for these items more often.
Meanwhile, 41% of consumers shop at discount stores to find these basic necessities.
The data also showed that 40% of consumers said they cut back on spending in other areas to afford these necessities.
Yet even with these cuts, the survey found that 58% of consumers still have to go into debt, borrow money or use savings to cover expenses. About 72% of consumers in the lowest income category, earning less than $25,000 a year, are in the same boat, the data shows.
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Only 40% of consumers say they earn enough to pay for their expenses, as inflation continues to outpace wage growth. Meanwhile, only 24% of consumers in the lowest income category say they can afford expenses.
“It’s not sustainable,” NRF CEO Matthew Shay said in a statement. Shay said removing Chinese tariffs “is the quickest way to ease some of the inflationary pressure in the US economy.”
According to Shay, these tariffs have driven up prices for American consumers and cost the average family more than $1,200 a year.