Consumer confidence drops as inflation squeezes US shoppers: survey

NEW YORK - Two-thirds of US consumers say they are planning to reduce spending over the next six months as a result of inflation, according to a recent survey of roughly 2,000 people conducted July 15 to 18 by Morgan Stanley.

The number of people who said they intend to engage in leisure and entertainment has slowed from a rise of 7 percent earlier this month to a modest hike of 2 percent, while visits to shopping malls have dropped 14 percent and travel intentions are starting to cool.

However, households with incomes of more than 150,000 US dollars "are resilient in their travel intentions thus far", according to the survey.

"Consumer spending soared in recent cycles as households accumulated savings and enjoyed lower debt levels. Now, high inflation and slow increases in jobless claims seem to be exhausting consumers," said Bloomberg last week in its report of the survey.

"Wages are not keeping up with inflation... it's becoming increasingly challenging for households to pay their bills. People are starting to change their behavior in unusual ways in order to stretch their dollars a little long further," Chris Low, chief economist at FHN Financial, was quoted as saying.