We have been dealing with record high inflation for some time now, and the average consumer has been able to maintain their level of spending. However, as prices and interest rates continue to rise, the people’s willingness to spend is showing signs of slowing down. Liza Abramowicz, writing for Bloomerberg, offers her views and insight on consumer burnout.
Inflated Prices, Deflated Benefits
Burnout is simple fatigue, frustration, and apathy due to long bouts of stress and anxiety. One group facing consumer burnout is seniors, especially those on Social Security benefits. Inflation had resulting in a Social Security increase by almost six percent. Unfortunately, that increase has done little to protect seniors from raging gas, food, and housing prices. Despite this, the average U.S. consumer has kept up demand, and has continued to fuel the economy.
So, if seniors and other groups were maintaining their spending, what’s changed? The answer…interest rates rose.
Now, seniors must weigh the value of spending versus saving. Their decision has an impact on the economy at large. By saving more, corporate profit margins shrink, and companies readjust their operations. On one hand this potentially slows economic growth, on the other it lowers inflation and prices for essential goods.
The Demands on Consumers
In times of inflation, there is an unfair expectation for consumers to regulate their own wants and needs. However, the economy is resilient and so are seniors. Retirement income doesn’t pair well with inflation, but saving is the key to success. By saving, it doesn’t have to be “all or nothing” like the Fed makes it seem sometimes. If we save more than we spend, we can both maintain some economic movement, though not as fast, while still protecting ourselves from excessive costs of living.
Consumer burnout is a real thing. Seniors shouldn’t have to carry the burden of the economy while trying to protect their benefits and retirements. The Council for Retirement Security is here to help. We can’t do much with inflation, but we can work intensely to see that every senior receives the benefits they deserve; that way seniors don’t have to worry about burnout of any kind.
