Recession Concerns Spark Adjustments to Spending, According to Auriemma Group

By Samantha Herron.
Updated Oct 20, 2022

NEW YORK (PRWEB) October 20, 2022 - Jamie Dimon, CEO of JPMorgan Chase recently cautioned that the US and the world would face a recession in the next 6-9 months. And if the UKs cost-of-living crisis is any indicator, some consumers may soon be pinching pennies to afford everyday expenses. Auriemma Group recently conducted research in both regions and found that 55% of US credit cardholders and a staggering 83% of credit cardholders in the UK say rising costs will have a negative impact on their finances in the next 12 months.

Rising food and fuel costs are already having a significant negative impact on half of US cardholders, and these consumers anticipate costs to swell further over the next year. Looking to the UK, these impacts are even greater, with about nine-in ten (88%) reporting a negative impact from rising food costs and 81% saying the same about fuel.

Weve been studying changes to consumer spending and borrowing behavior throughout the cost-of-living crisis in the UK and believe those shifts may be predictive of things to come on our side of the pond, says Jaclyn Holmes, Director of Research at Auriemma Group. Navigating these increasing costs comes at a price for many, particularly those with heavier debt loads or fixed incomes.

According to Auriemmas research, US cardholders are already acting in response to rising costs. Over the past 6 months 52% curbed non-essential spending, 36% sought out more sale items than usual, and 33% switched to more affordable brands.

While often opaque to cardholders, the economic outlook due to the impacts of inflation, rising interest rates, and Russias war with Ukraine may cause these measures to intensify. In the UK, tensions are already hitting a fever-pitch with some activists going as far as flinging tomato soup at a Van Gough painting to draw attention to the impact of fossil fuels, but also rising costs.

These are very, very serious things which I think are likely to push the U.S. and the world I mean, Europe is already in recession and theyre likely to put the U.S. in some kind of recession six to nine months from now, Dimon said.

US cardholders agree with Dimon. Auriemmas research found that 80% believe the US will enter a recession within the next 2 years. And this belief is changing attitudes towards spending. Over nine-in-ten of those who think it is very likely that the US will enter a recession say they have changed their spending behavior because of rising costs.

The UKs cost-of-living crisis has gained media attention for the better part of the year, and the US may not be far behind, says Holmes. Dimons assertion highlights the delicate state of the economy, and US consumers have already begun to feel the effects. Looking to the UK as an example, US issuers and merchants can expect some notable changes to spending over the next year.

Survey Methodology

Cardbeat US

This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma from August-September 2022, among 80o+ adult credit cardholders. The number of interviews completed is sufficient to allow for statistical significance testing between sub-groups at the 95% confidence level 5%, unless otherwise noted. The purpose of the research was not disclosed nor did the respondents know the criteria for qualification.

Cardbeat UK

This Auriemma Group study was conducted online within the UK by an independent field service provider on behalf of Auriemma from April-May 2022, among 80o+ adult credit cardholders. The number of interviews completed is sufficient to allow for statistical significance testing between sub-groups at the 95% confidence level 5%, unless otherwise noted. The purpose of the research was not disclosed nor did the respondents know the criteria for qualification.

About Auriemma Group

For more than 35 years, Auriemmas mission has been to empower clients with authoritative data and actionable insights. Our team comprises recognized experts in four primary areas: operational effectiveness, consumer research, co-brand partnerships, and corporate finance. Our business intelligence and advisory services give clients access to the data, expertise and tools they need to navigate an increasingly complex environment and maximize their performance. Auriemma serves the consumer financial services ecosystem from our offices in New York City and London. For more information, call Jaclyn Holmes at (+1) 646-454-4200.