Impact of inflation on consumer behavior - Statistics & Facts

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Published by

D. Tighe,

Jul 29, 2022

Due to supply issues caused by a number of factors, including increased consumer demand, Russia’s invasion of Ukraine, and the coronavirus (COVID-19) pandemic, inflation around the world is rising. In other words, the cost of living has increased practically everywhere. Overall, the global rate of inflation was estimated at roughly seven and a half percent in 2022 compared to 2021, which is a major spike in comparison to previous years analyzed. To give an example of what this means, in the United States, the past few months have been difficult for many consumers, especially low-income households who already struggle to get by financially. And although rising prices do not have a massive impact on everyone, there were few U.S. consumers who said the current wave of inflation did not influence their financial situation at all.

What has gotten more expensive?

The current economic climate is causing a number of issues for consumers worldwide, from rising prices for everyday products to problems with product unavailability and delivery delays. Some of the areas that have gotten more expensive include typical consumer goods, such as groceries, but gas prices and housing costs have also shot up. According to a study fielded in April and May 2022, nearly 60 percent of millennials surveyed worldwide experienced financial hardship when filling up their cars. Going forward, people are expecting to spend more money than before on all kinds of things, from utility bills to vacation trips.

Global consumer reception

Unsurprisingly, people are worried that life has become and will remain more expensive. As a result of the news on rising inflation in 2022, consumers are trying to be extra mindful of what they buy and how much they spend. A significant percentage of shoppers across the globe have started buying cheaper alternatives to the products they usually buy while also seeking out more coupons and/or discounts than they used to. Furthermore, people plan to minimize spending by traveling and dining out less. That being said, there are certain things many consumers are not willing to let go, even at a time like this (e.g., TV subscriptions and gym memberships).

Tomorrow’s economy

While this sudden spike in inflation may not last forever and prices for everyday goods and services might go down and level out eventually, the future is not yet certain. In truth, a significant share of consumers do believe it will get worse before it gets better. When asked about it in April 2022, over 60 percent of struggling households in the United States expected the impact of inflation to become greater in the next few months. People with a more comfortable financial situation, on the other hand, generally did not expect prices to increase further, but many did believe the current state of inflation would persist.

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