Katherine Hamilton and Alison Sider:
More U.S. consumers now say they’re dialing down spending than when inflation spiked in 2022. Over 70% of people surveyed from May to July plan to tighten their budgets for items with large price increases in the year ahead, according to the University of Michigan’s economic sentiment survey.
High earners were much more likely to keep spending as usual, Joanne Hsu, the Michigan survey’s director, said in her analysis.
Executives at IHOP, McDonald’s and Denny’s have said their middle-class customers are on the hunt for deals, while many lower-income diners are staying away altogether.
At IHOP, customers are choosing cheaper menu items and buying fewer drinks. Denny’s data showed more people who make between $50,000 and $75,000 are coming in for promotions like its $5 breakfast.