After over a year of monetary policy tightening, concerns about high interest rates have risen considerably for potential purchasers of both large household goods and vehicles. However, consumers still cite high prices as the top reason they believe it is a bad time to buy durable goods.

Source: University of Michigan (Haver Analytics).

A historically high proportion of people believe it is a bad time to buy large household goods or vehicles. While concerns about high interest rates have become a major reason given for negative sentiment about these purchases (dashed lines), consumers still cite high prices as the top reason they believe it is a bad time to buy durable goods (solid lines). This negative sentiment is especially striking given that actual goods consumption has been surprisingly resilient. Consumers’ discontent with high prices may weigh more heavily on consumption as excess savings decline and consumer budgets tighten (External LinkÇakır Melek and Pollard 2022).

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Authors

Nida Çakır Melek

Senior Economist

Nida Çakır Melek is a senior economist in the Economic Research Department of the Federal Reserve Bank of Kansas City. She joined the Bank in August 2013 after receiving her Ph.D…

Emily Pollard

Associate Economist

After I graduated from Carleton College in 2016 with a BA in mathematics and economics, I was excited to join the research team at the Federal Reserve Bank of Kansas City. During…