The “new normal” is permanent

In March, consumer sentiment slumped again, hitting its lowest level since August 2011; the University of Michigan reported Friday High inflation, volatile oil prices, geopolitical unrest, and now rising interest rates had left consumers with a bitter taste about the state of the US economy. Unfortunately, it’s not going to go back to the old economy ever again.

Consumers are battling the highest inflation since 1982, and with it, a barrage of rising costs: Mortgage rates increased again this week, bringing the traditional 30-year fixed-rate to 4.42%, adding an average of $300 a month for homebuyers. Gas prices are still at record highs in parts of the country, and the latest Consumer Price Index showed most essential goods are up by 7.9% year on year.

While gas prices are falling again, prices on consumer products are likely to stay high as brands and retailers pass on increased costs to consumers.

There’s an irony here Voters wanted higher wages, but they didn’t stop to think that THEY would be paying for the higher salaries. On REDDIT, people complain about the cost of eating out, saying that checks have gone up by as much as 40%. Grocery stores operate on very slim margins, and either had to pass costs onto shoppers or go out of business but at the same time But what consumers read is that a lot of brands are reporting record profits while the oil companies are refusing to drill new wells because they would instead give shareholders more money That’s what has them angry.

The rise in gas prices means that many people are looking at hybrids or fully electric vehicles, but as the WSJ recently said, “good luck finding one” It’s almost to find hybrid cars in dealers’ lots. The waiting list for a fully electric vehicle could be as long as a year.

Even if you want a new SUV, there’s a chance you’re going to have to take what’s available at full MSRP, or higher Some car dealers are raping the public by adding on dealer surcharges that could raise the price by thousands.

Rather than accept what’s been happening consumers want to go back to the way things were before the pandemic. That’s not going to happen.

Let’s lot also forget the media’s part in this. The press kept running stories about how “consumers were flush with cash,” and corporations took notice and wanted that extra cash. Some brands purposedly created product shortages to raise prices, and they thought consumers wouldn’t notice, but they are, and a lot are switching brands.

The new normal is here to stay, and consumers will continue to vent their frustration while Wall Street is handing out average bonuses over $250K. It’s called capitalism, but I don’t think it’s supposed to work quite like this.

About richmeyer

Rich is a passionate marketer who is able to quickly understand what turns a prospect into a customer. He challenges the status quo and always asks "what can we do better"? He knows how to take analytics and turn them into opportunities and he is a great communicator.

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