Inflation in America is at a 40-year high, while household incomes, adjusted for rising prices, are falling at the fastest pace since the government began collecting data in 1959.
That’s largely because the cost of food, fuel and housing has been climbing so dramatically. The price of commodities shows no sign of going down much anytime soon, thanks to the war in Ukraine, while a tightly constrained housing market in the US may keep prices higher than normal for the next few years, even as interest rates rise.
But what about non-essential items? There one can see the beginning of a correction that may have surprising impacts for both business and markets. A recent report by Currency Research Associates, a US-based financial strategy firm, identified strong anecdotal evidence that a “global ‘buying strike’ is emerging”, as consumers around the world begin to cut back their spending on anything they don’t absolutely need.