'The Big Shrink': Americans are pulling back on spending as high prices persist

foxbusiness.com:

Penn Mutual Asset Management CIO Mark Heppenstall joins ‘Mornings with Maria’ with his perspective on several U.S. economy headlines.

A growing number of Americans are pumping the brakes on spending as they continue to face elevated prices for everyday necessities like food, rent and auto insurance.

New findings published by Empower show that 62% of Americans feel their purchasing power and income in relation to prices is decreasing due to persistent inflation. Another 82% said their money does not go as far as it used to. Additionally, 79% of respondents noted that many household goods like cereal and chips are dwindling in terms of serving sizes.

With prices remaining uncomfortably high, more people have said they are hitting the limit on how much they are willing to spend, according to the «Big Shrink» study.

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About one-quarter of respondents – 27% – said they have hit a pricing limit, and aren't willing to pay anything more for grocery store staples – or else will cut the items from their shopping lists. 

A shopper scans coupons in a grocery store in Washington, D.C., on May 23, 2024.  (Tom Williams/CQ-Roll Call, Inc via Getty Images / Getty Images)

More than one-third of Americans are not willing to pay even $1 more for a cup of coffee, while 20% of Gen Z shoppers said they would stop buying fruits and vegetables if prices continue to rise.

Under President Biden, inflation skyrocketed to the highest level in 40 years. The cost of everyday necessities like rent, groceries and gasoline surged, prompting the Federal Reserve to hike interest rates to a two-decade high. Higher interest rates, in turn, created other downstream effects, pushing