5 Reasons Americans Keep Spending Despite Inflation

In the past year, Americans have gone on a seemingly endless spending spree while the Federal Reserve has raised interest rates to higher levels than expected. These actions initially baffled users on a prominent Internet forum, but the conversation revealed some reasons for this trend.

What is going on is much different from the usually more cautious mood of the American public, mainly during economic trouble or after a turbulent time in history. They are spending more and saving less, and that’s not good if a recession is looming.

Reasons Americans Keep Spending Despite Inflation

Don’t Spend On Big Purchases An interesting theory is that since the country’s interest rates are so high, no one wants to make big purchases, but they feel safe enough to spend much money on smaller items. These items add up over time and appall those watching.

Inflation Is Stealing Your Money When inflation rises, there is a perception that the value of your money is lost. Because the prices of goods are rising, the money you have, particularly in savings, loses its purchasing power. Therefore that money that you have grows more worthless as inflation increases.

The Pandemic Changed Everything Simply stated, people don’t care anymore. After three years of the pandemic, they must do whatever they want and gratify their immediate desires. They are still determining if there will be a tomorrow, so why save when that’s not guaranteed?

Emotional Spending A commenter created this idea: people aren’t thinking with their heads. They aren’t reasoning or thinking at all. They are acting emotionally in buying all this stuff. They want to feel good, and purchasing things makes them happy.

YOLO Specifically, a commenter questioned what the statistics were regarding the people who were spending the most money. They guessed that Gen Z and Millennials would be the top spenders.

Swipe Up To Read More