Back in July, a ChangeWave survey of 4,525 consumers pointed to yet another clear downturn in U.S. consumer spending—despite the injection of $150 billion in tax rebates to stimulate the economy.

In that July survey, we focused on the key reasons why consumers are spending less. As the following chart shows, the chief culprits are Inflation (56%; up 4-pts) and Higher Energy Costs (56%; up 7-pts).

These twin factors have skyrocketed since January in terms of their overall negative impact on consumer spending. Meanwhile, other consumer behaviors like Reducing Debt (24%), Saving More Money (18%) and Investing More Money (8%) have declined.

But Wait...There's More to the Story!

Here at ChangeWave, we’ve taken a close-up look at the impact of inflation and higher energy costs on consumers.

First, in our July survey, we asked respondents to tell us what effect—if any—higher energy prices will be having on their discretionary spending over the next 90 days. And while 15% of respondents said rising energy costs were having a Significant Effect on their spending, an unprecedented three-in-five (60%) said they were having a Modest Effect (see also, "Energy Costs Gobble Up Discretionary Dollars")

All told, that’s 8 points higher than in our previous survey of just two months earlier!

In another related question, 12% of respondents said their driving had been “Very Much” affected by the rise in gasoline prices—a three fold increase since the beginning of the year. But it's not just driving habits that have been altered by the rise in inflation. When we asked consumers if rising prices in general had caused them to make other changes to their normal spending routine, one-in-two (50%) said yes. And among that group, an extraordinary 68% said the number one change they’ve made is to Eat Out Less.

Note that 52% also reported they're Shopping More at Discount Stores, and 41% said they’re Buying Lower Cost Items.

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