The news: US inflation accelerated in June, and rising prices continue to force consumers to make hard choices about what they buy and when they buy it.
A tough environment: Inflation was broad-based with prices rising across nearly every area of the economy. For example, grocery prices rose 1.0% MoM, restaurant prices grew 1.0%, and apparel prices increased 0.8%.
A pullback in spending: US consumers spent $74.1 billion online in June, a 6.0% MoM decline (and a 1% YoY gain), per Adobe.
Not everyone feels the pain: Despite rising prices, higher income and younger consumers continue to spend on luxury. That trend is helping luxury sales continue to soar.
The big takeaway: Inflation continues to eat away at most consumers’ spending power, which is forcing them to prioritize what, where, and when they spend. That’s one reason that we expect back-to-school sales to rise just 0.7% this year, and the thriftiness could affect the holiday season as well.
Go further: For more on The Era of Uncertainty, read our report here.