Are consumers finally fed up with rising inflation prices? Some experts seem to think so based on new insights into spending habits.
New data suggests consumers have started cutting back their spending on services. Experts said it could be one of the first signs that inflation might be too high.
"I don't know where it's headed!" said Vatche Kechichian of Pasadena on Monday. "Definitely cutting back on spending for myself."
Jack Liebersohn, an assistant professor of economics at the University of California, Irvine said this is a concerning trend because it could contribute to a recession.
Luxury spending in particular seems to be slowing. The first signs of an economy in decline come in less money being put into services businesses like nail and hair salons and massages parlors.
"Why would I keep spending on myself and keep putting myself in financially worse situation if we don't know where this is going to end?" added Kechichian.
And with airfare prices rising, travelers aren't looking to take off. Searches for flights are down 13 percent from this month in 2019.
"We expected a shift back to normality and people spending more on services and it sounds like that's not what's happening and could signal a broader decline in consumer spending," added Liebersohn.
Restaurant owners in Los Angeles County said they are seeing a shift too. Servers told CBSLA they are seeing customers cut back on high-dollar menu items like wine bottles.
"The price of dairy, meat and seafood has gone up but we don't want to pass it on to the customers," said Jimmy Christos of Twoey's Restaurant in Pasadena.
According to the website Open Table, restaurant reservations were down 11 percent last week from this time last year.
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