NEW YORK (WETM) – Inflation, sharp increases in gas prices, ending unemployment checks, and a possible resurgence of COVID, are all reasons people’s willingness to spend money could lose steam. Consumers that were excited to be spending in a recovering economy in the spring months, might be taking a minute to re-evaluate as the summer moves along.
Vaccinations have been driving reopenings, and businesses in New York are counting on that post-pandemic summer activity. But, early July reports of U.S. consumer sentiment dramatically dropped by five points, to its lowest level since February.
“A drop of five points reflects that people are getting concerned,” said Don Levy, Director at Siena College Research Institute.
Concerns about inflation are springing up, as it has risen by 5.4 percent in the past year. Upped prices might deter people from buying what researchers had predicted high demand for.
“We saw demand for automobiles, but no we are seeing people paying above sticker price, which almost is in recent memory, is unheard of in automobiles. so that demand may shrink,” said Dr. Levy.
“Inflation is one of those things that, from the consumer perspective can be a self-fulfilling prophecy where, if people have a fear of inflation, they can actually further perpetuate that,” said Kamala Keeley, President of Three Rivers Development in Chemung County.
The COVID Delta variant is ripping through unvaccinated individuals. Dr. Levy says in a recent poll by Siena College Research Institute, about half of New Yorkers are concerned about a resurgence of COVID in the fall – a significant reason for cautious spending.
“Uncertainty of not knowing where the nation is heading in the fall, I think people are a lot more cautious with their spending in a lot of cases,” said Keeley.
Keeley reports that recent data shows upward trends in Chemung County’s economy, and are forecasted to continue that way. Though, she urges people to get vaccinated, because a possible resurgence of COVID could completely overturn that prediction.
“Yet another reason to get vaccinated is to basically help these businesses stay open and staffed… Because I don’t know how they are going to do it if they face another round,” said Keeley.
Businesses in upstate New York would be especially affected by slowed spending as many of them are reliant on summer activity.