U.S. Consumer Spending Trends 2023

Reading Time: 14 minutes

September 29, 2023
Jack Mackinnon – Senior Director of Cultural Insights at Collage Group

Consumer spending trends 2023: In today’s economic climate, financial pressures such as inflation, fears of recession, and the resumption of student loan repayments are shaping consumer spending trends and behaviors. To successfully navigate this challenging economic environment, often referred to as the “bad vibes economy,” brands need to gain a profound understanding of their consumers’ pain points and priorities. 

In Collage Group’s Spring 2023 Financial Services report, our dedicated team of consumer research professionals found that 30% of the total population felt ‘bad/very bad’ about their financial situation. With 59% of Americans stating they ‘worry often’ about their financial situation, and their financial future. 

In this article, Collage Group unpacks this data to provide specific insights on diverse America and discerns how consumers are adapting to America’s current economic conditions by highlighting disparities in spending based on gender, ethnicity, and age. Read below for actionable strategies to help brands effectively address current consumer spending trends through three major economic stressors: Inflation, recession fears, and the return of the student loan.

    1. Three Key Stressors Contributing to the “Bad Vibes” Economy
    2. Consumer Spending Trends Across Gender, Ethnicity, and Age

Three Key Stressors Contributing to the “Bad Vibes” Economy

Inflation, recession fears, and the resumption of student loan repayments are burdening both households and businesses. This is affecting consumer spending patterns, corporate earnings, and creating a challenging economic landscape. These pressures contribute to what some refer to as a “bad vibes” economy.

Below, we elaborate on the three primary economic pressures consumers currently face.

Stressor #1: Inflation Is Coming Down but Consumers Don’t Feel It

The Consumer Price Index (CPI) is a metric that monitors the average price changes of goods and services commonly bought by households. CPI offers valuable insights into inflation and the cost of living.

Year-over-year CPI inflation hit a 40-year high of 9.1% in June 2022. Certain items in this year experienced rapid price growth, with notable examples including food at schools (+305%), eggs (+59.9%), margarine (+43.8%), fuel oil (+41.5%), and airline fares (+28.5%). This has had a significant impact on consumers, with 54% of Americans stating food costs to be their top financial concern.

How does this compare with inflation rates today?

In contrast to the 2022 spike, CPI inflation has receded over the past year, reaching 3% in June 2023. However, despite this decline, consumers still aren’t experiencing the positive effects of easing inflation.

For instance, coming back to our Financial Services research presented at the beginning of this article, the majority of Americans worry about their financial situation today and in the future, and one-third describe their current financial situation as bad. Plus, 78% stated they were concerned the prices of goods and services will increase over the next 12 months.

Yet, despite this sentiment, as of May 2023, personal income in the United States observed a 0.4% rise, as reported by the Bureau of Economic Analysis. Disposable personal income (DPI) – personal income after tax deductions – also grew by 0.4%. Additionally, personal consumption expenditures (PCE) – consumer spending on goods and services – saw a slight increase of 0.1%. Notably, retail spending showed a 0.2% upswing from May to June, with consumers amplifying their expenditures at electronic, furniture, and home furnishing stores. Online sales similarly displayed a robust rise. 

Hence there seems to be a disparity between:

    1. How consumers feel about current CPI inflation rates and their financial situation;
    2. Actual inflation rates and disposable income;
    3. Consumer spending behavior, with consumers spending more despite feeling the pinch.

Hence, it’s important we unpick the data, to truly understand how your consumers are reacting to recent economic challenges. With this in mind, College Group has undertaken an in-depth analysis of U.S. consumer spending patterns to draw more precise conclusions, pinpointing trends across distinct consumer segments. Keep reading to find out more.

Stressor #2: The Fear of a Recession Could Cause a Recession

Increasing interest rates, and an unexpected banking crisis are cited as the primary reasons for an expected recession in the U.S. The Federal Research Bank of New York reports a 60.8% likelihood of a U.S. recession occurring within the next 12 months – which is the highest recorded value in over a decade.

As a result, there’s growing concern among consumers regarding their job and employment situation. For instance, a 2023 Deloitte financial well-being index study revealed the number of consumers expressing such concerns grew from 18% in February to 25% in May. Research by Collage Group supports these findings, with younger generations particularly concerned about their job security (21% of Millennials and Generation Z report losing their job is their top financial worry).

Millennials are individuals born between the early 1980s and late 1990s. Generation Z are individuals born between 1996 and 2010.

These heightened concerns regarding job stability mean consumers are adopting a more cautious spending approach, which is reducing overall consumer demand. Consequently, we’re witnessing a self-fulfilling prophecy in action, where the fear of a recession itself could contribute to a recession.

Stressor #3: The Return of Student Loan Repayments Is a Significant Financial Stress for Younger Generations

The financial services firm Jefferies estimates that the return of student loan repayments will cost U.S. consumers $18 billion a month by September, potentially slowing down an already pressurized national economy. This is estimated to hinder economic growth by 0.2% in the final quarter of 2023. The impact will be felt by 17.6% of the U.S. population, especially millennials who’ll lose 6.5% of their spending power as repayments resume. 

According to our research findings, the resurgence of student loan repayments is a source of significant worry for younger generations. Specifically, 23% of Generation Z individuals have identified this as their foremost financial concern. Moreover, our study reveals that younger generations are not only anxious about their own job stability but also harbor concerns about the job security of their spouses, with 15% of Millennials and 13% of Generation Z sharing these apprehensions.

Collage Group wanted to understand how inflation, recession fears, and the resurgence of student loan repayments are impacting consumer spending within diverse America.

In pursuit of this, we’ve reviewed the latest trends revealed by our own primary research to give unique insights segmented by gender, ethnicity, and across generations.

Gender Gap in Financial Concerns and Spending

Our Spring 2023 report on Gender Insights in Financial Services unveils intriguing distinctions in consumer spending patterns between men and women. Here, we present the key discoveries from our research.

Women express greater financial concerns than men.

Our findings suggest that women tend to harbor less optimism regarding their financial circumstances compared to men. Specifically, 35% of women feel good or very good about their finances, in contrast to 40% of men. Additionally, nearly two-thirds of women (63%) frequently fret about their finances, while this figure stands at 55% for men.

How should brands react? Tailor your brand messaging and positioning to address the specific concerns and priorities of women. Spotlight solutions that alleviate financial worries, such as tools designed to enhance financial resilience and provide personalized guidance for long-term financial planning. Furthermore, underscore the importance of financial security in the lives of women.

Distinct financial goals for men and women.

Our research reveals that this year, women place a higher priority on financial preparedness for emergencies and home ownership compared to men. For instance, 55% of women aspire to have enough money to avoid worrying about emergencies, compared to 46% of men. Additionally, 29% of women aim to own a home with a paid-off mortgage, while this goal applies to 25% of men.

How should brands respond? Customize your brand messaging to align with the unique goals of each gender:

    1. For women, emphasize the sense of peace and stability that arises from financial preparedness and secure housing.
    2. For men, focus on long-term legacy planning.

In both cases, position your brand as a trusted partner committed to helping individuals achieve their personal financial aspirations.

Gender disparities in financial account ownership.

Men are more likely than women to possess checking/savings accounts, retirement accounts, prepaid credit cards, and non-retirement investment accounts.

For example, 89% of men (versus 87% of women) have a checking/savings account, while 17% of men (versus 15% of women) possess a prepaid credit card. Furthermore, 16% of men (compared to 8% of women) hold a non-retirement investment account.

How should brands take action? To target men as your core customers, focus on campaigns that highlight the benefits of financial products and services they are already inclined to use. Simultaneously, strategically introduce complementary services or enhancements to tap into the potential of this receptive audience.

Women exhibit lower trust in financial institutions.

Across the board, women exhibit lower levels of trust in financial institutions compared to men. For instance, 30% of women trust banks to act in their best interest, while this figure stands at 34% for men. Additionally, 23% of women trust financial advisors or wealth management firms to act in their best interests, compared to 28% of men. And 12% of women trust investment firms to act in their best interest, in contrast to 20% of men.

How should brands respond? Offer women flexible, fee-free, and penalty-free financial products. Extend flexible financial products that do not come with fees or penalties to further engage with women. Highlight the convenience of your services and actively support financial education and empowerment initiatives to strengthen your connections with women.

You can learn more about gender-specific disparities in consumer spending trends by exploring the results of our Financial Services: Spring 2023 Gender Insights report.

Consumer Spending Trends Vary by Race and Ethnicity

Consumer spending trends - Hispanic and White populations are most worried about their financial situation

Our recent survey on consumer spending uncovered distinct reactions to economic stressors across different segments. We found a really interesting difference in the level of concern and resulting financial behaviors from Hispanic, Black, and Asian American consumers.

First, Hispanics exhibit heightened economic concern; 37% expressing significant worry about their financial situation in the next 6 months. In contrast, Black Americans seem to be less affected by the current economic challenges with only 24% indicating notable financial concern. Asian Americans fall in the middle, with 49% stating a slight level of apprehension about their financial situation over the next 6 months.

However, how do these differing perspectives influence consumer spending behavior across different ethnicities? 

Consumer spending trends among Hispanic Americans: Budgeting everyday items.

Hispanic consumers exhibit the highest level of concern regarding their present and future financial circumstances. Consequently, they’re inclined to purchase fewer items and, among the items they do buy, they tend to choose more economical brands compared to the general population. This tendency is particularly noticeable for alcoholic beverages, apparel, and beauty products. This transition toward budget-conscious spending illustrates prudence in the face of economic uncertainty.

Consumer spending trends among Black Americans: Steadfast spending.

Conversely, our findings suggest that Black American consumers are less affected by current and future financial challenges. Despite having a lower average income, these consumers anticipate maintaining their current spending patterns. As a result, they’re less inclined to decrease their purchases or opt for more affordable items in response to personal and economic uncertainties. This connects to Collage Group’s research around Black optimism and a collectively hopeful approach to challenges. For instance, in our Essentials of Black Consumers 2022 report, we report on the four unique traits of this consumer group, which are: Determination, authenticity (real), believing, and forward-thinking.

Consumer spending trends among Asian Americans: Making long-term adjustments.

Asian American consumers demonstrate a moderate level of concern regarding the present and future financial landscape. These consumers are channeling those concerns to make long-term adjustments, rather than daily/weekly shifts in spending. This includes actions such as canceling travel plans, postponing home renovations, and re-calibrating timelines for significant purchases such as appliances and cars.

Differences Across Generations Regarding Financial Stressors and Consumption

Younger generations experience less stability and more adaptations in the face of economic uncertainty.

Consumer spending trends - Younger generations experience less stability and more adaptations in the face of economic uncertainty.

We’ve identified consumer spending trends across gender and ethnicity, but how does current consumer spending vary across generations?

To find out, the Collage Group asked Generation Z, Millennials, Generation X, and Baby Boomer populations the same question: How have your buying habits for the following items changed, if at all, over the past 6 months?

We discuss our most significant findings below.

Younger generations report their financial situation to be a top concern and choose to live with their parents as a result.

Research indicates high inflation rates are a primary concern for both Generation Zs and Millennials: 

    1. 35% state the cost of living is a top concern in 2023, compared to 29% in 2022;
    2. 51% state they’re living paycheck-to-paycheck in 2023, compared to 46% in 2022;
    3. 46% state they have taken on a paying side job in 2023, compared to 43% in 2022.

In response to current economic pressures, younger generations have found a way to prop up their disposable income by living with their parents, with 1 in 3 U.S. adults aged 18-34 reporting to do so. This could create a significant reservoir of household spending potential, offering a prime opportunity for brands to tap into.

Generation Z adopt a cautious approach to debt management.

As the suspension on student loan repayments lifts, younger Americans, particularly Gen Z, will face a different set of financial challenges that are worth exploring. When we looked at generational approaches to financial downturns, we found that younger Americans are more likely to curb spending in product categories such as apparel, beauty, skin care products, and alcohol. They also tend to opt for cheaper grocery and home care brands as they prioritize smart financial decisions and credit score improvement. As Generation Z makes up 20.67% of the U.S. population, these trends will have a substantial impact on B2C brands.

Across generations, consumers are opting to purchase cheaper food necessities.

It’s estimated that Americans spend on average $109.00 on groceries per week, which is a decrease of $2.19 compared to 6 months ago. Our research supports these statistics, with 42% of surveyed respondents stating to have bought cheaper groceries. More specifically, 37% of Generation Z, 42% of Millennials, 46% of Generation X, and 41% of Boomer populations are choosing cheaper food necessities. Hence, there’s consistency across generations.

It’s intriguing to observe that a significant number of consumers choose to purchase more affordable food items instead of decreasing the number of food products they buy. This trend is noticeable across all generations, with 30% of the overall population reducing their grocery purchases. This suggests consumers are substituting pricier brands with more economical options, like store-brand products, rather than refraining from purchasing food items altogether.

With this insight in mind, brands can stand out in the market and meet their consumers’ needs by providing cheaper food products, and by helping their consumers save money on their grocery shopping. For instance, the meal-kit company HelloFresh has seen its revenue double between 2020 and 2022 due to the cost-saving potential this service provides. Reports indicate that by combating food waste, HelloFresh has the potential to save a family of six 69% on their weekly grocery shop over a two-month period. 

Across generations, consumers purchase fewer apparel items.

Collage Group’s survey found that across generations, consumers are purchasing fewer apparel items (48%). 

Breaking these findings down per generational group, we find 42% of Generation Z, 44% of Millennials, 49% of Generation X, and 53% of Boomer generations state they buy less clothing goods. 

It’s interesting that although consumers are buying fewer apparel items, the majority don’t seem to be opting for cheaper items. We found that 21% of the total population is choosing cheaper fashion brands. This could be due to conflicting pressures, with the environmental impact of fast and cheap fashion known. That is, Collage Group found consumers are willing to pay a premium for more sustainable goods.

25% of Generation Z, 24% of Millennials, 23% of Generation X, and 14% of Boomer generations are resorting to buying cheaper clothes due to the economic pressures they face. Here we’re witnessing a slight difference in behavior across generations. And our results are supported.

According to a 2020 survey conducted by Vogue Business, over half of the participating Gen Z individuals predominantly purchased clothing from fast-fashion brands such as H&M, Gap, Zara, and Forever 21. Denise N. Green, associate professor of fiber science and apparel design at Cornell University in Ithaca, New York, states: “Gen Z – they say, study after study, survey after survey, more than any other generation – they’re saying they want sustainable fashion, and more than any other generation they are the biggest segment of the population buying fast fashion”.

Hence to make cuts, younger generations choose cheaper brands over buying less, whereas older generations choose to buy less but continue to invest in top-end brands.

Younger consumers deprioritize loan repayments in favor of investments and savings.


consumer spending trends - Younger consumers deprioritize loan repayments in favor of investments and savings.

The overall financial goals of consumers will impact their purchase decisions and will deliver key insights for brands to respond to. With this in mind, we asked: What are your most important financial goals for the upcoming years?

We present our more notable findings below.

Generation Z seeks stable financial investments 

With the financial hurdles they face, Gen Z consumers are mindful to preserve their credit scores for financial stability. This demonstrates their desire for long-term financial security and responsible debt management. This cautious approach will limit credit cards and “buy now, pay later” schemes. In a recent interview, I explained the situation:

“This generation [Gen Z] tends to look forward with an eye for creating stability. So, we would expect them to move cautiously into debt strategies for adjusting their finances. Generation Z doesn’t want to do anything to threaten their credit score or hopes for buying bigger ticket items – like homes – in the future. When you add in the fact that Gen Z is hungrier for financial literacy training and teaching than any other generation, you get a picture of a generation that prioritizes smart, stable financial decisions over rash, in-the-moment reactions. We do know that Gen Z is significantly more likely to have digital wallet apps than older Americans and may be looking towards these digital tools to help them navigate the upcoming budget crunch.” – Jack Mackinnon, Senior Director of Cultural Insights at Collage Group.

Most consumers are primarily dedicated to saving money

A significant percentage of consumers (43%) across generations share a common priority – to save for emergencies. 40% of Generation Z, 42% of Millennials, 43% of Generation X, and 45% of Baby Boomers share this goal. However, reports indicate that 53% of Americans are dissatisfied with their existing emergency funds. This suggests consumers are likely to make efforts to control their spending in order to narrow the disparity between their primary financial goal and their current financial situation.

On top of this, older generations are also keenly focused on saving for retirement, with 36% of Generation X and 31% of Baby Boomers stating this as their primary goal.

Consequently, brands must implement initiatives to support their consumers in their savings endeavors. One effective approach is introducing incentive and reward programs that encourage and facilitate money-saving behavior. For instance, Starbucks Rewards is widely recognized as one of the most outstanding retail loyalty programs, boasting a highly engaged membership base. As of October 2022, there were 28.7 million active Starbucks reward members, showcasing an impressive 16% year-over-year growth in the program, as reported by CNN.

Despite the return, student loan repayments aren’t a top priority 

Despite the return of student loan repayments, these payments aren’t a top priority for consumers, a trend that’s shown across generations. This could be because of the Department of Education’s COVID-19 student loan forbearance program meaning these loans haven’t been top-of-mind for consumers. It would be interesting to repeat our study once student loan repayments resume, to see how this will impact consumer spending and the financial goals of younger generations.

Partner With Collage Group to Access the Latest Trends in Consumer Spending

Collage Group’s comprehensive consumer research platform reveals the nuances of consumer spending trends across demographics. 

Gender-specific trends show distinct responses to economic pressures, with men and women adjusting their spending behaviors in different ways. Ethnicity-based variations highlight the unique concerns and strategies of Hispanic, Black, and Asian American consumers. Similarly, generational differences underscore how Generation Z, Millennials, Generation X, and Baby Boomers are each navigating today’s economic challenges.

These findings provide brands with valuable insights to tailor their strategies and offerings to align with consumer needs and priorities. As the economy continues to evolve, businesses that adapt to these consumer spending trends and effectively address the challenges of what has been termed as the “bad vibes economy” will be better positioned to build stronger relationships with their customers and thrive in the ever-changing economic landscape. 

That’s why having the ability to access current consumer research is crucial for any business aiming to stay relevant. Working with Collage Group, you’ll unlock entry to our leading consumer insights software solution. Our members get instant access to the deepest, most actionable, and freshest cultural insights to win over diverse American consumers.

Contact us at the form below to learn more about how you can gain access to these diverse consumer insights and much more in our Cultural Intelligence Platform.

Other Recent Research Articles & Insights from Collage Group

Jack McKinnon

Jack McKinnon

With more than 15 years of diverse consumer research experience, Jack Mackinnon offers deep expertise in Multicultural, Generational, LGBTQ+ consumers, and their intersection. Jack’s research extends into exploring culture-at-large, investigating broader societal trends not easily categorized into typical areas of research.

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