Americans Have Inflation Fatigue, and They’re Splurging
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Here's your Money Briefing for Friday, January 27th. I'm J.R. Whelan for The Wall Street Journal. We talk a lot about inflation on the show. Prices rising at rates not seen in 40 years have thinned out people's paychecks and caused them to pull back on spending or buy cheaper products than they normally would. But it's also given people inflation fatigue, prompting them to defy the grip of inflation.
They still have a job and want to feel like they live a good life. So they're splurging on these more expensive items in order to feel like they still have an income.
On today's show, we'll talk with Wall Street Journal reporter Rachel Wolf about revenge inflation spending. And we'll hear from an Atlanta man about how he's saved by shopping at the dollar store to afford a $6,000 couch and an even more expensive watch. That's after the break.
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What is 'inflation fatigue' and how is it affecting American spending habits?
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Americans have had it with inflation. They're tired of skimping and doing without. So if there's some wiggle room in their budget, some have gone in the opposite direction, purchasing expensive vacations and fancy watches. But is that a wise move in an unsettled economy? In a moment, we'll hear from a 38-year-old Atlanta resident about his recent splurges. But first, Wall Street Journal reporter Rachel Wolf wrote about this topic, and she joins me now. Hey, Rachel, thanks for being here.
Thanks so much for having me.
So, you know, Rachel, no matter what kind of economic situation you're in, inflation has pretty much weighed down on your personal finances for much of the past year.
people have had to make all sorts of budgeting micro decisions. So they're not only cutting back, they're not only perhaps going on fewer vacations, buying less fun items at the grocery store, but they're also trading down, buying cheaper products than they used to, switching to generic versions of brands that they've bought their whole lives or even switching to shopping at, say, the dollar store for groceries grocery items and household goods that they used to always buy at CVS or the grocery store.
And while inflation has ticked down in recent months, it's not like prices are coming down. They're actually rising, just at a slower pace. So how are people able to take a hard turn and start splurging on things?
So some are calling this revenge inflation spending, which is basically... No, wait, hold on, hold on.
Revenge inflation spending? It almost sounds like people have a score to settle.
People do feel like they have a score to settle with inflation. They want to reclaim agency over their finances. They still have a job and want to feel like they live a good life. And so they're splurging on these more expensive items in order to feel like they still have an income. It's a phenomenon similar... to staying up really late after working hard and doing chores all day it's called revenge bedtime procrastination which means you're like reclaiming these lost hours in your day by kind of screwing yourself over by going to bed too late it's a similar thing where you know after having to spend more time budgeting having to trade down buy more bulk items generic versions of products that they always bought the branded version of
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