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consumer Behavior on the Brink: Tariff Concerns trigger Spending Shifts
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A new report reveals that consumer resilience is nearing its limit as concerns over tariffs surge, potentially leading to significant changes in consumer behavior. The Kearney Consumer Stress Index indicates a fragile stability, warning retailers to prepare for delayed reactions and altered spending habits as new costs become visible.
Consumer Sentiment: Calm Before the Storm?
The latest Kearney Consumer Stress Index report suggests that the current market stability may be deceptive. Calculations of consumer sentiment mirror consumer behavior and spending, indicating a potential turning point. According to the report, consumers feel increasingly constrained in their ability to influence macroeconomic challenges, with global uncertainty remaining a persistent factor.
Compared to the first quarter of 2024, a critical advancement is that consumers have transitioned from optimizing their spending to being on the brink of making sacrifices, according to Katie Thomas, lead at Kearney Consumer Institute.
Did You Know? The Consumer Price Index (CPI) rose 3.3% in May 2024, indicating continued inflationary pressures that impact consumer spending[Source:[Source:U.S. Bureau of labor Statistics].
The Rising Tide of Tariff Concerns
The most significant shift highlighted in the report is the sharp increase in consumer concern regarding trade disputes. Data from Kearney shows that in the third quarter of 2024, only
