Annual US inflation has dropped to a three-year low, according to the latest Consumer Price Index report. Economist Dr. Mike Walden breaks down the implications of this development, shedding light on the current economic landscape in the United States.
Despite the decrease in inflation, a recent study conducted by Bankrate has revealed that nearly one-third of U.S. adults doing back-to-school shopping this year are going into debt, or already have, to pay for it. This marks an increase from the previous year, indicating the financial strain that many families are facing.
Natalie Kotlyar, a national practice leader of BDO’s retail and consumer products industry group, highlighted the impact of inflation on prices, stating that back-to-school shopping has become more expensive compared to previous years. While inflation has cooled slightly, it continues to drive up prices, with June’s inflation data showing a year-over-year increase of 3.0%.
The Bankrate survey found that 31% of back-to-school shoppers are using credit cards or buy now, pay later services to cover the costs. Additionally, 46% of respondents are implementing money-saving strategies, such as seeking out deals and coupons, to mitigate the financial burden.
Despite the challenges posed by inflation, Bankrate noted that its impact on back-to-school shopping has decreased since the previous year. While 32% of shoppers said inflation influenced their shopping behavior in 2022, only 28% reported the same in the current year.
Another study conducted by Credit Karma in July found that 31% of parents are unable to afford back-to-school shopping for their children this year. Additionally, 34% of parents plan to take on debt to cover the expenses, with 16% expecting to accumulate up to $1,000 in debt.
To alleviate the financial strain of back-to-school shopping, experts recommend starting early to research options and find discounts. Saving throughout the year for school supplies can also help distribute the costs more evenly. Comparing prices, leveraging loyalty programs, and taking advantage of price-matching policies are additional strategies to maximize savings.
Furthermore, experts advise parents to prioritize purchases and wait to buy non-essential items. Waiting until October can result in significant savings, as retailers often offer pre-holiday sales during this time.
In conclusion, while annual inflation has decreased to a three-year low, many families are still grappling with the financial challenges of back-to-school shopping. By implementing money-saving strategies and being strategic in their purchases, parents can navigate this period of economic uncertainty more effectively.