Households already started to reduce non-durable purchases, for example of home electronics, last year. As most people have less and less money left over, restaurant visits, cinema, theater and hotel nights have also had to cut back.
In the last four weeks, households’ real consumption, i.e. adjusted for inflation, has decreased by 9 percent compared to the same period last year, statistics from Swedbank show.
– The persistent trend is that we spend more money on food and basically cut back on most everything else, says Pernilla Johansson, senior economist, Swedbank.
Many worried about personal finances
Young people, who often have small margins, keep their wallets ever tighter, according to a survey by Swedbank. According to the survey, more than 80 percent of young adults between the ages of 18 and 29 are worried about their personal finances. Saving too little, not being able to afford to buy a home and what will happen to the pension are common concerns.
– Every third young person has reduced their savings, says Swedbank’s youth economist Julia Hofvendahl.
According to Swedbank, for young people who can still save, it seems that they mainly save for short-term, specific goals, such as a trip.
New for millennials
That even the middle class now needs to tighten up is a new situation for many, not least for millennials, i.e. young adults born from 1982 to the mid-1990s. This is stated by David Larsson Heidenblad, docent in history at Lund University.
– Many experience something they have not experienced before, especially those who are rich enough to have been able to borrow for a home. High interest rates in combination with responsibility for providing is new for millennials, and many now have to ask themselves what they can afford for their children.
Maybe the middle class will temporarily stop renovating and traveling, thinks David Larsson Heidenblad. But right now it is almost impossible to predict what the economic situation will look like in a few years.
– A lesson from the pandemic is that memory is short and that changes happen quickly. If we get a real security risk, we will no longer talk about the price of peppers.
