A new JD Power report published Thursday found that 62% of Americans delayed major purchases in the last month as higher gas, grocery and household costs continued straining consumer budgets.
The report said affordability concerns are intensifying across the country as inflation and higher living expenses pressure household finances. About 87% of consumers said they are worried prices for everyday goods will continue rising in the coming months, while 41% described themselves as “extremely worried,” up from 37% two months earlier.
JD Power also found that 69% of Americans remained financially unhealthy in April, with many consumers reporting weaker spending power and growing difficulty managing regular expenses. Inflation rose 3.8% year-over-year in April, marking the biggest annual increase since May 2023.
Groceries, Gas Costs Bite
JD Power said gasoline and grocery prices remained the biggest affordability concerns for households. Around 72% of consumers said they paid more for gas compared with the previous month, while 78% reported higher grocery prices.
The report also found that 52% of Americans believe their normal expenses are less affordable than they were six months ago. Vulnerable consumers, stressed households and Americans over the age of 40 reported the highest levels of financial strain.
The survey warned that prolonged financial pressure could reduce savings, increase debt burdens and force some Americans to delay homeownership and retirement plans. JD Power also said some consumers may increasingly rely on emergency retirement withdrawals to manage rising costs.
Inflation Risks
The findings arrive amid growing concerns over another potential wave of food inflation. Earlier this week, market commentary account The Kobeissi Letter warned fertilizer prices had surged 44% since the start of the Iran conflict, raising risks for future grocery prices.
The affordability concerns also come as economists warn inflation pressures could intensify further because of rising energy costs linked to the Iran conflict and disruptions around the Strait of Hormuz.
Economist Mark Zandi recently warned that the U.S. economy was becoming “fragile” as slowing consumer spending, elevated inflation and geopolitical tensions continued pressuring household finances.
A recent CNN/SSRS poll also found that 77% of Americans believe President Donald Trump’s policies have increased the cost of living ahead of the midterm elections.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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