Household demand · United States
Higher prices meet very different financial cushions
Special report published 9 October 2026 · Interviews: 23 June–21 September
Only 20% of consumers in the lowest income third expected to keep buying as usual when items had large price increases, compared with 42% in the highest third. That 22-percentage-point gap helps explain why widespread pressure on households can coexist with resilient spending by some customers.
The University of Michigan’s special report on gasoline prices and expected spending examines purchasing intentions. Its question asks about purchases in the next 12 months of goods with particularly large price increases. This forward-looking horizon is separate from the June–September interview period. The answers therefore need a more careful reading than a simple forecast of total consumption.
By income
By stock ownership
Income gap: 42 − 20 = 22 points. Stock-holdings gap: 50 − 18 = 32 points. Original chart using Table 2 of the report.
The spending cushion is an interpretation, not a causal experiment
A larger financial cushion can make it easier to tolerate a higher bill. But income and stock ownership also overlap with other household characteristics. The chart cannot isolate the effect of an additional dollar of income or a gain in share prices. It compares groups of people who may differ in several ways.
The useful business question is which customers have room to absorb a price increase, and which may change products, delay a purchase or reduce quantities. Applying an economy-wide average to a particular retailer can hide that distinction. A grocery business and a luxury-goods business need not serve the same spending mix.
Counting households is different from counting currency
Consider two fictional households whose combined monthly spending is 1,100 currency units. One begins at 100 units and cuts spending by 20%. The other begins at 1,000 and increases spending by 5%. This is an arithmetic illustration, not a reconstruction of the survey or a claim about how its income groups actually spent.
On a narrow screen, scroll the table sideways. Keyboard users can focus the table region and use the arrow keys.
| Household | Before | After | Change |
|---|---|---|---|
| Smaller budget | 100 | 80 | −20% |
| Larger budget | 1,000 | 1,050 | +5% |
| Combined | 1,100 | 1,130 | +2.7% |
Half the households cut spending sharply, yet combined spending rises. The reason is the different starting amounts. Survey shares count responses; an expenditure total sums money. Moving between them requires information about spending levels, survey weights and actual behavior.
This does not prove that high-income spending will offset everyone else’s cutbacks. It explains why a high share of worried respondents does not translate mechanically into the same percentage decline in sales.
Read the intentions without overstating them
Does “cut back” mean reduce every kind of spending?
The question targets things with large price increases. A household might switch brands, shop elsewhere or defer one appliance while keeping its overall budget similar. Quantity, quality, timing and cash expenditure can move differently; the survey response alone does not tell us which adjustment ultimately occurred.
Can the responses be converted into a predicted sales decline?
Across all consumers, 31% expected to buy as usual, 54% to cut back and 16% to stop buying affected items. These are respondent shares, not the sizes of spending changes. They cannot be read as a 70% decline in spending. The published shares add to 101% because of rounding.
What evidence would test whether intentions became behavior?
A useful follow-through would compare later observed spending over a matching period, ideally by income group and product category. Separate price increases from quantities sold, and check whether customers shifted between sellers. A nominal revenue increase can occur even when unit volumes soften.
A practical way to use the result
When reading a company’s demand commentary, ask whether growth came from more customers, higher prices, a different product mix or larger purchases by a smaller group. The survey supplies a reason to investigate those channels. It does not supply a company-level revenue forecast.
