As economic pressures mount, Americans are planning to tighten their belts this summer. A recent Yahoo Finance-Marist Poll reveals that nearly half of U.S. consumers intend to reduce spending in the coming months, with inflation and potential tariff impacts weighing heavily on their financial decisions.
The poll found that 49% of Americans plan to cut back on summer spending, while 45% expect to maintain current levels. Only a slim 5% anticipate increasing their expenditures during the traditionally active summer months. This cautious approach reflects growing concerns about both current economic conditions and future uncertainties.
“We’re seeing a pronounced shift in consumer sentiment,” says Gregory Daco, chief economist at EY. “There’s a clear disconnect between the robust economic data we’ve observed and how Americans actually feel about their financial situation.”
This spending pullback comes as the Biden administration considers implementing new tariffs on Chinese imports, potentially affecting everything from electric vehicles to medical supplies. Meanwhile, former President Trump has proposed across-the-board tariffs of 10% on all imports and potentially higher rates for China specifically.
The survey indicates these tariff discussions are already influencing consumer behavior. Nearly 60% of Americans worry that new tariffs would increase prices for everyday goods, with 41% expressing significant concern. These anxieties cut across party lines but show notable demographic patterns.
Women appear particularly concerned, with 65% worried about tariff-driven price increases compared to 53% of men. Additionally, 66% of Americans earning under $50,000 annually expressed worry about potential price hikes, highlighting how economic policies disproportionately affect lower-income households.
“Tariffs ultimately function as a tax on consumers,” explains Mary Lovely, senior fellow at the Peterson Institute for International Economics. “The burden falls heaviest on those with the least financial flexibility.”
The poll also revealed interesting regional variations. Northeastern consumers showed the greatest reluctance to spend, with 57% planning summer cutbacks. The Midwest followed at 51%, while the South and West reported 47% and 44% respectively.
These spending concerns persist despite recent positive economic indicators. The U.S. economy grew at a 1.6% annual rate in the first quarter of 2024, and unemployment remains near historic lows at 3.9%. However, inflation continues to exceed the Federal Reserve’s 2% target, with April’s Consumer Price Index showing a 3.4% year-over-year increase.
Retail sales figures from the Commerce Department have shown resilience, with April sales rising 0.2% after a strong March. Yet economists warn this momentum could falter if consumer sentiment continues to deteriorate.
“American consumers have been the backbone of this economic recovery,” notes Ellen Zentner, chief U.S. economist at Morgan Stanley. “Any significant pullback would reverberate throughout the economy, potentially slowing growth just as we’re navigating inflation challenges.”
The poll suggests consumers are most likely to cut discretionary spending first. Travel, dining out, and entertainment top the list of planned reductions. This shift could particularly impact service industries still recovering from pandemic disruptions.
Some economists see a silver lining in this cautious approach. “Reduced consumer spending might actually help cool inflation without requiring more aggressive Fed action,” suggests Dana Peterson, chief economist at The Conference Board. “It’s a painful adjustment for households, but potentially beneficial for long-term economic stability.”
For retailers and service providers, these findings suggest a challenging summer ahead. Many businesses typically rely on seasonal spending boosts, but may need to adjust expectations and strategies. Some analysts recommend focusing on value propositions and necessity items rather than luxury or discretionary offerings.
The timing of this consumer pullback is particularly noteworthy as it coincides with election season. Economic sentiment often influences voting patterns, and both major parties are positioning themselves as champions of middle-class financial security.
As summer approaches, Americans appear caught between conflicting economic signals. Government data suggests stability, but kitchen-table economics feels increasingly precarious for many households. Whether this planned spending reduction materializes fully remains to be seen, but it clearly signals growing economic anxiety across the country.
For now, it seems that many Americans are choosing caution over confidence when it comes to their summer financial plans. And with tariff talks continuing to dominate headlines, that cautious approach may persist well beyond the summer months.
