Survey: Middle-income consumers spending less amid recession concerns

Rising inflation and interest rates are causing many consumers to take proactive steps to secure their finances.

Most middle-income American households are preparing for a recession by cutting back on spending, delaying major purchases or planning to work longer before retirement, according to a survey by financial services provider Primerica. And about 77% believe the country will be in a recession by the end of the year.

Nearly three-quarters (71%) report cutting back on restaurant/takeout meals, up from 57% in March, the survey found. Nearly the same amount (69%) say they plan to keep their current technology instead of upgrading, up from 44% in March. And about half (49%) are planning to budget or cut back on groceries, up from 37% in March.

Additional findings from Primerica’s “Middle-Income Financial Security Monitor” for the second quarter of 2022 — a national survey that measures changes in the sentiments of middle-income families in the U.S. about their finances — are below.

• Inflation drives top concerns. The economy continues to be a major stressor for middle-income Americans, with 41% rating inflation as their top concern. Paying for food and groceries also ranks high (26%, up four percentage points since March) as does their current financial situation (25%, up eight percentage points since March).
• Reassessing major purchases. Overall, more than one-third (38%) have already delayed a major purchase due to rising interest rates, including the biggest hike by the Fed in nearly 30 years. Still, about the same percentage (39%) say they plan to take a vacation in the next 12 months.
• Many rethinking future financial plans. Forty-two percent say they plan to work longer before retirement, and three-quarters (75%) of employed middle-income Americans say they don’t think they have enough saved to retire comfortably, up 10 percentage points since March. In addition, one in five plan to find a higher-paying job (22%).

“Middle-income families are taking a hard look at their finances right now,” said Glenn J. Williams, CEO of Primerica. “Rising costs continue to eat into their bottom line amid fresh concerns of a recession.”

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