By Nupur Anand and Lannh Nguyen
NEW YORK (Reuters) – Most Americans cut back on spending last year in response to persistent inflation, a Bank of America survey showed on Friday.
According to a Bank of America survey of more than 1,100 respondents, 73 percent of Gen Z consumers between the ages of 18 and 26 have changed their lifestyle because of price increases.
Of these, 43% chose to cook at home over eating out, 40% spent more on clothing, and 33% compared grocery shopping to essentials.
“Gen Xers are definitely looking for ways to improve their financial health,” said Holly O’Neill, president of retail banking at Bank of America. “They are actively making lifestyle changes to fight inflation.
Rising gasoline and food prices in the US have eroded consumer finances, prompting the Fed to raise interest rates.
Bank of America CEO Brian Moynihan said last month that even though their currency is healthy, consumer spending is shrinking.
“Consumer payments remain strong,” O’Neill added. “In terms of crime, we’re still not where we were before the pandemic.” “Despite changes in spending and payment behavior, the consumer is still very healthy.”
Nearly four in 10 Gen Z respondents experienced financial hardship in the past year, causing them to stop saving or take on more debt.
They are less optimistic about improving economic conditions. Most respondents said the economy is unlikely to improve next year.
As Gen Z declines, older generations, including Boomers, have increased spending by up to 5%, according to the report.
(Reporting by Nupur Anand and Lannh Nguyen in New York; Editing by Steven Coates)