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Inflation Hits Highest Point in 40 Years

The inflation rate topped 9.1% in June, the highest percentage in 40 years, according to the U.S. Bureau of Labor Statistics. The Consumer Price Index was up 1.3% in June on top of the 1.0% increase in May. The energy index was up 7.5%, contributing to nearly half of the all items increase, and the gasoline index jumped 11.2%. 

The food index increased 10.4 percent in the last 12 months, the largest 12-month increase since February 1981. 

According to the annual back-to-school survey conducted by the National Retail Federation (NRF) and Prosper Insights & Analytics, 38% of consumers indicated they would cut back on spending in other areas to cover the costs of back-to-school shopping. Families expect to spend more on back-to-school items because of inflation and higher prices

“Families consider back-to-school and college items as an essential category, and they are taking whatever steps they can, including cutting back on discretionary spending, shopping sales and buying store- or off-brand items, in order to purchase what they need for the upcoming school year,” NRF President and CEO Matthew Shay says. “The back-to-school season is among the most significant shopping events for consumers and retailers alike, second only to the winter holiday season.” 

Back-to-school spending is expected to reach $37 billion, matching the record high from last year, with shoppers spending $168 more on average. Back-to-college spending is estimated at $74 billion, an increase from last year’s record of $71 billion. 

To combat the higher prices, consumers said they would shop early to find deals, and 56% had already started school shopping in early July. About three out of five shoppers planned to purchase school items during Prime Day deals on Amazon, 31% will shop for deals online and 20% will look for in-store deals. 

“We are seeing real shifts in the way people are shopping and spending on back-to-class items since before the pandemic,” says Prosper Insights executive vice president of strategy Phil Rist. “As a result, retailers are also shifting by bringing in inventory earlier and extending back-to-class offerings.” 

About Lindsey Thompson

Lindsey joined the NHPA staff in 2021 as an associate editor for Hardware Retailing magazine. A native of Ohio, Lindsey earned a B.S. in journalism and minors in business and sociology from Ohio University. She loves spending time with her husband, two kids, two cats and one dog, as well as doing DIY projects around the house, going to concerts, boating and cheering on the Cleveland Indians.

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