Americans are finally getting some relief from inflation after prices for key goods categories dropped last month.
(Bloomberg) — Americans are finally getting some relief from inflation after prices for key goods categories dropped last month.
Apparel prices fell by the most since the immediate onset of the pandemic in September, with declines across the board — from women’s dresses to men’s suits and children’s shoes, according to government data out Thursday.
Many household items got a little cheaper last month. Bedroom furniture prices fell by the most in more than a year. Appliances such as laundry equipment also posted sizable drops.
“What’s going to be a prevailing sentiment this season is just trying to cover the absolute necessities in your household,” said Lauren Fernandes, director of global thought leadership at researcher NIQ. “People, in my opinion, probably won’t be reaching toward a large new piece of furniture this year unless they need it.”
Clothing and furniture were among the few bright spots for households, however. Americans are still facing higher prices for most necessities, including housing and energy, and wage growth is no longer keeping up with inflation. Though a robust job market is offering many consumers the power to keep spending, some are feeling the pinch as purchasing power fades.
About 78% of Americans are considered “vulnerable” spenders, meaning they are being very cautious about their outlays, according to NIQ data. That’s an increase from 74% in 2022 as prices for basics like fuel and food weigh on shoppers.
Many people are relying on credit cards to make ends meet, and online buy-now-pay-later services is expected to hit a record-high this holiday season. Retailers, aware of the uncertain financial outlook, have increasingly turned to promotions in order to attract buyers.
Read more: Discounts Make a Comeback as Shoppers Get Picky About Spending
While the prices of certain goods are coming down, services are still increasing. Among categories that saw big gains in the Labor Department report were recreation services like tickets to live sporting events.
“There’s a lot of scrutiny on really doubling down on the holiday moments that actually matter to people, versus really spreading their spending wildly like maybe they did in the past,” Fernandes said.
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