U.S. Consumer Spending & Inflation Report: January 2023

Report summary

December brought a disappointing close to 2022, with consumer spending appearing to weaken even as inflation slowed. This price relief may be coming too late in consumers’ minds to trigger a boost to outlays: Household finances have been worn down by a year of declining purchasing power, and consumers of all income levels are feeling less financially secure as savings fall and credit debt rises.

Key Takeaways

  • Inflation continued to slow in December, but this dose of price relief seemed unable to meaningfully boost spending as purchasing power continues to wear down.
  • Consumer demand appears to be flagging for both goods and services as consumers increasingly make trade-offs amid budgetary pressures.
  • Household finances are starting 2023 on considerably weaker footing than was the case a year ago, with higher earners less insulated from the negative effects of elevated inflation.

About the authors

A headshot photograph of Kayla Bruun
Kayla Bruun
Senior Economist

Kayla Bruun is a senior economist at decision intelligence company Morning Consult, where she analyzes consumer spending, inflation and household finance trends, leveraging the company’s proprietary high-frequency data.

Prior to joining Morning Consult, Kayla was a key member of the corporate strategy team at telecommunications company SES, where she produced market intelligence and industry analysis of mobility markets. 

Kayla also served as an economist at IHS Markit, where she covered global services industries, provided price forecasts, produced written analyses and served as a subject-matter expert on client-facing consulting projects. 

Kayla earned a bachelor’s degree in economics from Emory University and an MBA with a certificate in nonmarket strategy from Georgetown University’s McDonough School of Business.

Follow her on Twitter @KaylaBruun. For speaking opportunities and booking requests, please email [email protected]

A headshot photograph of Sofia Baig
Sofia Baig

Sofia Baig is an economist at decision intelligence company Morning Consult, where she works on descriptive and predictive analysis that leverages Morning Consult’s proprietary high-frequency data. Previously, she worked for the Federal Reserve Board as a quantitative analyst, focusing on topics related to monetary policy and bank stress testing. She received a bachelor’s degree in economics from Pomona College and a master’s degree in mathematics and statistics from Georgetown University.

Follow her on Twitter @_SofiaBaig_For speaking opportunities and booking requests, please email [email protected]