Why can’t we stop spending? Banking expert shares his thoughts
Mar 9, 2023, 9:00 PM
According to a new report, 68% of parents with children over 18 have made some kind of financial sacrifice for their children. This begs the question, when should parents financially cut off their children? (Pexels)
(Pexels)
SALT LAKE CITY — As the Fed continues to raise interest rates, the spending of most people continues to go on and on. Which begs the question ‘Why can’t we stop spending?’
Tedd Rossman, senior industry analyst at Bankrate, joined Dave and Dujanovic on Thursday to discuss the reasons behind the spending habits of society.
Dujanovic asked, “What is going on? What are you seeing from the 30,000-foot up level?”
“I think what you are talking about actually does hit on some important contradictions in the economy,” Rossman said. “Because, you know, we have really good numbers like the lowest unemployment in 54 years. But that’s counterbalanced by high inflation.”
Dave asked, “Can you speak to that a little bit about how wages have gone up? But it just doesn’t seem like it, feels like we’re going backwards still?”
“If your wages are up 4 to 5 percent and inflation is six to seven , you’re still falling behind,” Rossman said. “There can be a vicious cycle to this.”
Rossman explains that as employees we love to get paid more, but as consumers we don’t want to pay more. And if companies are paying their employees more and raw materials are costing more. That’s going to cause everything to go up.
“And it kind of feeds of itself,” he said.
Dujanovic asked, “Why do people keep spending? Do you think that it’s largely because of inflation or are we emotionally spending?”
“It’s some of both,” Rossman said. “I mean, I think a lot of it is inflation, especially essentials and especially lower income households are bearing the brunt of it because they have less income to begin with.”
Dave & Dujanovic can be heard on weekdays from 9 a.m. to noon.
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