Though spending continues to grow and consumer inflation has cooled dramatically since its summer of 2022 highs, shoppers still feel skeptical about the strength of the American economy, according to a new Upside survey.

This trend is one of five highlighted in our inaugural Consumer Spend Report. To get the full scoop on consumer economic sentiments and how those sentiments are changing shopping habits, including the growing prevalence of uncommitted customers, continue reading here — or take a look at the full report, featuring data from over a billion retail transactions.

Consumer confidence in the American economy

Per Upside’s survey of the general population, a majority of respondents — 56% — see the economy as somewhat worse or much worse than one year ago. Only 22% of respondents see the current situation as an improvement over 2023. 

These results largely remain consistent across demographic groups, no matter the respondent’s age, household size, or household income. The most popular answer for all groups regarding consumer economic sentiment was that it is much worse now than it was last year, showing years of inflation have taken their toll. 

Of particular note, young people between ages 18 and 24 were most pessimistic about the economy, with only 12% of those surveyed saying the economy is better now than it was last year. Though no group was particularly optimistic about the economy, individuals aged 65 and older expressed the rosiest outlook: about 27% of those respondents said it is somewhat better or much better currently.

It makes sense, then, that negative feelings regarding household finances prevail, as well. About 43% of respondents see their own situation as somewhat worse or much worse than it was a year ago, a plurality for this particular question. Here, individuals between ages 25 and 34 were most likely to express optimism about their individual financial pictures — 34% of them reported that their household financial situation improved in the past year. But on the whole, consumers expressed concern about their household finances and the state of consumer inflation. 

An Upside user named Joe verbalized this particular sentiment:

“It’s a struggle these days to stay afloat financially.”

Another anonymous user agreed:

“In today’s economy, everybody is looking for any way to save a penny.”

Unsurprisingly, those with higher household incomes were more likely to report that their own financial situation either stayed the same or got better since last year.

Impact of economic uncertainty on consumer behavior

How do these sentiments actually show up in practice? Here’s a brief snapshot of consumer budgeting by retail category. 

These figures show that consumers remain firmly in a “save and conserve” mindset, though some of them are finding it difficult to stick to a budget in a few key retail categories. In grocery, for example, the majority of shoppers go over their set budget at least once each year — and on average, shoppers exceed budget about four times a year. 

Coupled with their responses about the economy and their behavior, these figures show shoppers aiming to cut back on what they don’t need and making careful choices about where they do business in order to maximize the value they receive on every transaction. The average person will not realistically consume less; they'll just consume differently (ordering chicken instead of steak at a restaurant, for example).

The “save and conserve” mindset is also illustrated by the fact that nearly 90% of survey respondents say they’re relying on coupons and promotions the same or more often this year than last. Upside user Maria said she’d inconvenience herself to get a price that works better for her household. 

“In this economy, every penny counts for my family,” she said. “I pass many gas stations and go out of my way to (get promotions).”

The “save and conserve” mindset is illustrated largely by the 58% of respondents who are cutting back spending because of the way they perceive the economy. It tracks that those most pessimistic about the economy are also most likely to say they are significantly cutting back their spending.

Another Upside user, Chris, seeks out promotions at restaurants to offset rising menu prices. “The cost of food has skyrocketed,” he said.

“It is nearly impossible to go out to eat and anytime I can get a few dollars back is extremely helpful.”

Get more consumer spending data

These survey responses regarding consumer economic sentiments and consumer inflation are part of an excerpt from Upside’s inaugural Consumer Spend Report 2024. Get your copy of the full report.

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