In today’s inflationary environment, many Americans are struggling to make ends meet, so they are taking on extra work to keep up with the growing cost of living, a new survey finds.
According to a study by Insuranks.com, 93 percent of working Americans have a side hustle, clocking in 13 more hours per week. More than half (51 percent) revealed that they are presently thinking about starting another form of employment. Some of the most common side gigs include taking online surveys, selling new and used items online, doing freelance work, and working a part-time job.
The poll, conducted with 1,000 full- and part-time employed Americans, noted that 44 percent say the side hustle is to make ends meet and cover their bills. Twenty-eight percent noted that they are completing extra work because inflation is sending costs higher, while 26 percent want to pay off their debt faster.
“2022 is shaping up to be an unpredictable year for Americans financially,” the report states. “With inflation putting extra pressure on our bank accounts, and an impending recession, you might be wondering what you can do to make some extra cash on the side.”
“There is no shortage in possible side hustles, and most only require an easy sign up through an app. Think Uber, Etsy, DoorDash, and Depop. The list of possible side hustles is growing, and there’s no shortage of opportunities for those who want to make a little extra money.”
Although the job market has been hot, there have been developing hiccups on the labor front. The four-week moving average for initial jobless claims, which eliminates week-to-week volatility, has been rising since the beginning of April. In the week ending June 11, the four-week average rose to a six-month high of 218,500, according to the Bureau of Labor Statistics (BLS) (pdf).
In addition, a recent Morning Consult report found that job search activity has cooled since the beginning of March, while improvements in the unemployment rate have flatlined across multiple income groups.
Meanwhile, other studies have highlighted the financial strain that households are facing due to rampant price inflation.
A new Numerator Realities & Routines study discovered that many consumers are responding to rising prices by cutting back on non-discretionary spending. According to the survey, 66 percent of “struggling” households are trimming their non-essential spending, including dining out (59 percent), non-essential food (57 percent), apparel (54 percent), and travel (42 percent).
With food prices rising 10 percent in May, the swelling costs are the nearby grocery store are most Americans’ chief concern, topping gasoline prices, noted a survey conducted by The Harris Poll on behalf of Alpha Foods.
In response to increasing food inflation, 52 percent of consumers are taking fewer trips to the supermarket, 45 percent are buying generic brands, and 33 percent are purchasing in bulk.
An in-depth Consumer Pulse report by McKinsey found that inflation is slowing consumers’ buying volume growth and forced consumers to prioritize their spending.
“Consumers bought mostly goods rather than services or experiences,” the report explained.
In May, retail sales tumbled 0.3 percent, down from the 0.7 percent gain in April. This was the first decline in retail sales since December, according to Census Bureau data.
Retailers are penciling in these consumer trends, says MarketResearch.com, a global intelligence provider. The firm noted that consumers would cut their spending on discretionary items (apparel and electronics), utilize private-label brands, and patronize low-cost retailers.
Indeed, a new analysis from the National Retail Federation (NRF), using data from the Census Bureau, noted that low-income households find it hard to cope.
“As inflation pressure ramps up, it’s beginning to impact a wider swath of U.S. households,” the retail organization said. “While almost 60 percent of households earning less than $25,000 are currently reporting difficulty paying usual household expenses, higher earning households are quickly catching up. That will become even more problematic as the Fed continues to raise rates and increases the cost of debt that Americans are relying on to pay their bills.”
Consumer confidence has been eviscerated. The University of Michigan Consumer Sentiment Index cratered to 50.2 in June, down from 58.4 in May—anything below 50 indicates contraction. The reading was lower than the market forecast of 58.
The monthly report also noted that the Consumer Expectations Index plunged to 46.8, while the Current Conditions Index eased to 55.4.
Americans are bracing for higher inflation, with 46 percent identifying inflation as the primary culprit for their bearish views of the economy. The June report highlighted that one-year inflation expectations edged up to 5.4 percent, while the five-year inflation projections rose to 3.3 percent.
“Overall, gas prices weighed heavily on consumers, which was no surprise given the 65-cent increase in national gas prices from last month (AAA),” said Surveys of Consumers Director Joanne Hsu in the report. “Half of all consumers spontaneously mentioned gas during their interviews, compared with 30% in May and only 13% a year ago.”
In the end, nearly 40 percent of U.S. households expect their financial situations will be much or somewhat “worse off” from the same time a year ago, according to the Federal Reserve Board of New York’s Survey of Consumer Expectations report in May. The same study highlighted that one-year household income growth expectations eased to 3.2 percent, while spending growth expectations soared to 9 percent.
Janet Yellen Expects ‘Unacceptably High’ Inflation in 2022
Treasury Secretary Janet Yellen believes that “unacceptably high” inflation will be here in 2022, telling ABC’s “This Week” on Sunday that soaring prices are a “global, not local” problem.
“These factors are unlikely to diminish immediately,” she said. “There are so many uncertainties related to global developments.”
That said, Yellen dismissed recession concerns, explaining that pandemic-era savings and a sizzling labor market do not make an economic downturn inevitable.
Brian Deese, the director of President Joe Biden’s National Economic Council, offered a different perspective about inflation. Speaking to CBS’ “Face the Nation” on Sunday, Deese cited “independent forecasters” who “see inflation beginning to moderate over the course of the year.”
During this month’s Federal Open Market Committee policy meeting, the Federal Reserve raised its inflation forecast for 2022 from 4.3 percent to 5.2 percent. However, the central bank lowered its 2023 and 2024 projections to 2.6 percent and 2.2 percent, respectively.