High Inflation and Interest Rates Impact Gen Z More than Older Generations
At 27 years old, even the oldest members of Gen Z are still decades away from their prime earning years and the generation as a whole is still building its spending power. As a result, Gen Z has shown more sensitivity to the impacts of high inflation and interest rates, but has also expressed a more optimistic outlook on their spending plans going forward.
Which of the following best describes how high interest rates/inflation impacted your home improvement decisions over the last year? (Share who said they spent less)
If interest/mortgage rates come down significantly over the next year, which of the following are you more likely to do? (Share who said they would invest more)
In early 2024, 55% of Gen Z homeowners said that they had spent less on home improvement services over the last year due to high interest and inflation rates, but 51% said they would increase their investment in home improvement projects should interest rates come down. For baby boomers, 38% said they had been spending less on improvements with 44% saying they would increase their investment if rates come down.
How has product price inflation affected how you shop for beauty products in the past year? Select all that apply.
Among beauty shoppers in April 2024, 92% of Gen Z said that they had changed how they shop for beauty products due to inflation with half saying they were buying cheaper brands. Nearly as many, 44%, of Gen Z beauty shoppers said they were searching around more for promos or coupon codes due to inflation, while 42% said they were simply buying fewer beauty products.
How have changes in the past year to inflation rates affected the amount you plan to spend on holiday gifts this year? (Share of respondents who said the impact would be positive)
As they consider the upcoming holiday shopping season, 67% of Gen Z still believe that changes to inflation rates in the past year will negatively impact the amount they plan to spend, but given that inflation rates have come down, a solid 22% of Gen Z say that drop will positively impact their spending. That is roughly triple the rate of older generations.
Compared to last year, how much do you plan to spend on holiday gifts?
Ultimately, Gen Z is showing greater optimism in their holiday spending outlook with 34% planning to spend more than last year, with another 53% expecting to spend the same amount. For older generations, just 23% expect to spend more, while 55% expect to spend the same amount.