Americans are burning through the excess savings they amassed earlier in the coronavirus pandemic, fuelling concern among a growing number of companies about the outlook for consumer spending once the one-off boost to the economy ends.
In this fourth-quarter earnings season several consumer-facing companies have hailed the resilience of an economy where wages are rising, unemployment remains at record lows and Americans are spending on experiences they missed early in the pandemic. Demand is booming for premium vodkas, customised Starbucks orders and Disney theme park tickets, executives report.
Others, though, have warned of a new caution among shoppers. Lower-income customers in particular are cutting back on purchases from cat litter to mattresses as inflation keeps prices high and as they spend money they had saved thanks to stimulus packages and lower spending after Covid-19 hit.