NEW YORK (Dispatches) - Prices on household goods have been rising for months in the United States, souring the national.
With inflation at a 40-year peak and little sign of immediate relief, the consumer-driven U.S. economy faces question marks, despite very low unemployment and accelerating wage gains.
Americans have seen a growing wave of price hikes since last year, amid global supply chain snarls and labor shortages, but the increases picked up speed after Russia-Ukraine war and sanctions on Moscow sent energy costs soaring.
Many observers expect the surge will force shifts in consumer behavior in the months ahead.
“Although inflation has been around for a while, it’s only really now starting to bite in a serious way,” said Neil Saunders, an analyst at GlobalData Retail.
More consumers will cut back as they conclude they “can’t keep coping with all these price increases,” he said.
- Limited ‘trade down’ so far - The recent batch of corporate earnings reports have shown some limited evidence of consumer shifts.
Kempczinski described the U.S. consumer as overall “in good shape,” but said higher prices for gasoline and rent are “why we need to make sure we continue to have value be an important part of our proposition.”
Jon Moeller, chief executive of the consumer products giant, said the company beefed up distribution to discount retailers, a shift that could preserve sales as those retailers see an increase in traffic of customers looking for bargains.