Millions of Americans lean on their credit cards to keep up with soaring prices across the board for daily expenses. Those who face a mountain of credit card debt, especially people with bad credit, resort to payday loans. While these loans are easy to get, they come at a high cost. For this reason, financial experts recommend payday loan debt consolidation to avoid sinking further into debt.
Understanding Consumer Habits and Spending
A habit is a behavior that becomes automatic through repetition. Moreover, habits are shortcuts the brain creates to shorten the amount of time-consuming deliberation. Cues in the environment typically trigger habitual sets of behavior to kick in. Although individuals can always choose to override their habits, overcoming these behaviors with deliberate intention is often challenging when they are distracted, stressed, or tired.
Consumers’ habits form around products and services, from how they shop, what they purchase, and how they use these purchases in their daily lives. Consumer spending, also known as personal consumption expenditures (PCE), refers to the total amount of money people and households spend on goods and services for personal use.
Factors Leading to Market Shortage
When the COVID-19 pandemic started in 2020, American consumers spent less and saved more because of lockdowns, record unemployment, stimulus payments, and high levels of fear and uncertainty. However, when most states lifted COVID-related restrictions in 2021, Americans started venturing out of their homes and opening up their wallets again.
Besides the chaotic changes in consumer habits, pandemic-related factory shutdowns, worker shortages, port congestion, bottlenecks on product components, unfavorable weather patterns, and Russia’s invasion of Ukraine all coalesced to constrict supply for numerous products. As a result, various industries that shrank dramatically during the pandemic are now scrambling to meet soaring consumer demands, resulting in widespread delays and shortages of consumer goods.
The Impact of Rising Prices on American Consumers
The fundamental economic principle of supply and demand dictates that when demand outpaces supply, prices rise. As overall supply chain conditions worsen, sustained shortages of various products and commodities contribute to elevated inflation. When inflation rises, the cost of living goes up, significantly impacting consumer habits and spending.
Major Shortages Affecting Consumers in the United States
Although bottlenecks have loosened for several product types, consumers experience difficulty obtaining products in certain categories such as grocery, housing, and vehicles. Since these categories account for a large share of consumer spending, severe supply constraints play a significant role in the rise of overall inflation.
Shortages may depend on where consumers buy their groceries due to regional differences in supply. However, countless see their local grocery stores with empty shelves. Meats, dairy, plant-based proteins, eggs, fruits, vegetables, canned food, pet food, toilet paper, pasta, and liquor may be hard to come by.
The ongoing new entry-level housing shortage is large and rising. The combination of low supply and high demand is causing prices to rapidly escalate and trigger affordability issues for homebuyers to come up with larger down payments.
Shortage of New Vehicles
Vehicle inventory is still at rock-bottom levels due to the global shortage of microchips. While auto manufacturers estimate production won’t return to pre-pandemic levels until 2023, chipmakers predict that chip production could take up to two years to meet current demand.
Learn More About Payday Loan Debt Consolidation
DebtHelper is an IRS-approved 501c3 Non-Profit Florida Corporation with a mission to educate, advise, and empower people to improve their lives and strengthen their communities. Moreover, we’re here to assist Florida residents with Payday Loans in getting a 60-day deferment on loan repayments under the State of Florida Payday Advance Law.
For non-Florida residents who require Payday Loan assistance, we will negotiate with payday lenders in setting up repayment plans of six to twelve months, providing affordable payments and relief from harassing collection calls. We can also help individuals with more than one Payday Loan by consolidating all loan payments into one lower monthly payment that will be distributed to each lender. Contact us today to learn more about the services we offer.