CLEVELAND — A new trend shows people are saving more of their disposable income than spending it.
According to Consumer Watchdog Experts, the personal savings rate in the U.S. is at 3.4%, which they say is a significant increase from September.
But at what cost is this impacting local businesses and restaurants?
“There are days where we’re kind of just sitting here, staring at each other, wishing that more traffic was coming through downtown,” said Downtown Cleveland’s Zanzibar Soul Fusion Executive Chef, John Russell.
As the Executive Chef at Zanzibar in Downtown Cleveland, John Russell tells News Five’s Remi Murrey he’s seen a shift in consumer spending.
“Inflation going around, people are scared about, you know is this going to continue, is this going to end soon, so they want to try and save their money a little bit more,” Russell said.
“You know, people are focusing on what they absolutely have to pay,” said Consumer Watchdog Director at U.S. Public Interest Research Group, Teresa Murray.
Along with Russell, Murray says rising costs in gas and food is a big reason people are being cautious with their money. She also points to increased mortgage rates.
“Mortgage rates are up about 50% from a year ago, so they were below 4%, and now the typical mortgage rate for a 30-year loan is over 6%,” said Murray. “So, for people who are buying homes, that means that it's more expensive. Some landlords are raising rent, so consumers are getting it from a lot of different angles.”
While Murray says it’s a good sign people are saving their money, she says this means businesses and restaurants will have to work harder to attract customers’ attention, like Zanzibar offering different specials around the holidays.
“You know if they are going to choose to spend money, they’re choosing to spend it with us,” Russell said.
“If there's a business who thinks that all they have to do is turn the lights on and unlock the door and people are going to come pouring in, that may not be the case. People have choices,” Murray said.
Murray says she’s confident this current trend won’t last long.
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