Study: Young Americans cut spending, shun restaurants as prices rise
New York (Reuters) – Most young Americans have cut their spending in response to persistent inflation over the past year, a Bank of America survey showed on Friday.
Seventy three percent of Gen Z consumers between the ages of 18 and 26 have changed their lifestyles because of increased prices, according to a Bank of America survey of more than 1,100 respondents.
Of those, 43 percent chose to cook at home instead of dining out, 40 percent spent less on clothes, and 33 percent pared down grocery purchases to the essentials.
“Gen Zers are definitely looking for ways to improve their financial health,” said Holly O’Neill, president of retail banking at Bank of America told Reuters. “They are proactively making lifestyle changes to combat inflation.
Gasoline and food prices have been rising in the US, eroding consumer finances, prompting the Fed to keep interest rates elevated.
Bank of America’s CEO Brian Moynihan said last month that consumer cash balances are coming down, even though their finances are healthy.
“Consumer repayments still remain strong,” O’Neill added. “From a delinquency perspective, we are still not where we were pre-pandemic. Even though there has been a change in spending and payment behavior, the consumer is still very healthy.”
Nearly 4 out of 10 Gen Z respondents also experienced a financial setback in the last year, prompting them to stop saving or take on more debt.
They also remain less optimistic on economic conditions improving. A majority of respondents said the economy was unlikely to improve over the next year.
While Gen Z is cutting back, older generations, including Boomers, increased spending as much as five percent, the report showed.
(Reporting by Nupur Anand and Lananh Nguyen in New York; Editing by Stephen Coates)