Inflation Nation: 2024

March, 2024

Inflation rates have come down! Hooray?

When we released our first report on inflation in 2022, inflation rates were climbing to their peak of 9.1%. As of January 2024*, they’ve dropped to 3.4% — significantly lower than that peak, but not quite at the pre-pandemic level of ~2%. When our first wave showed us that not everyone was feeling the pinch equally, we grouped our respondents into three segments based on attitudes about inflation and spending behavior: The Resilient, The Anxious, and The Vulnerable.

For this third wave in 2024, we looked at our initial segments to see if their composition has changed and if there have been any shifts in people’s financial outlooks or spending habits as a result of lowered inflation rates: Are people still revenge spending after being on wallet lockdown?

What We Found:

The Impact of Inflation

  • Mindful spending has replaced revenge spending. While inflation rates have subsided, the still- high cost of everyday items is forcing people to think twice before spending.
  • Labor costs are top of mind. With 43% of people attributing inflation to increased labor costs, people are feeling the pinch as brands are seen as passing along those costs to customers.
  • We’re in a mood deficit. People are cutting back on fun lifestyle purchases, making them feel even more negatively about their personal finances as well as the state of the economy.

The New American Dream, Defined By You

  • The Economic divide is widening. The Resilient are even better off than last year while The Vulnerable are even worse off.
  • The American Dream is getting personalized. People are beginning to question longstanding norms and rewriting a vision for the future that fits with their lives, not the other way around.
  • People across all segments have cut back on savings. Embracing a “live for today” mindset might be the latest trend among the financially resilient, but the same behavior could signal trouble for those more financially vulnerable.

The Role of Brands

  • Customer perceptions are politically driven. Knowing your audience’s political affiliation can be key to understanding their inflation mindset.
  • Brands competing with shoppable influencers face a new challenge. As influencers turn personalities into brands and sway shoppers to buy products seamlessly through social, traditional brands have an opportunity to use their size and age to their advantage.

For the full report, click ‘Download PDF’ below.

*Sources: US Inflation Calculator Statista.

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