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Inflation is devastating the poor, while wealthy spend more: Major companies shift 2022 outlooks

Inflation isn’t a universal experience for Americans.

New reporting shows that the poor and wealthy deal with inflation in very different ways.

Stimulus checks, inflating costs of gas and food, and other cost factors are driving a gigantic wedge between the haves and have-nots.

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What’s the impact of inflation on the wealthy and poor?

It turns out wealthy shoppers have continued splurging, partly causing inflation issues to persist and grow.

However, many economists have been surprised at how fast poor have pulled back. Low-income shoppers have pulled back their spending significantly faster than expected over the last two months.

They are focusing on necessities, and turning to cheaper options and stores as well.

That’s a major shift from last year, when stimulus checks and rising wages allowed the poorest Americans to finally begin getting ahead, feeling some level of comfort in the economy.

It was a shift, but one that didn’t last long.

Kisha Galvan, a 44-year-old with eight children, told the Associated Press that shopping ahead has ended. Without pandemic-related government support, and with inflation at record-highs- the answer has been shopping meal to meal.

“I shop meal to meal,” she said. “Before we didn’t have to worry about what we were going to get. We just go get it.”

What are stores seeing with inflation and this gap?

Stores like Walmart say they’re watching customers buy cheaper items. Especially when it comes to food. Families are leaning into the items that last longest, or can be spread the furthest.

Kohl’s says customers are spending significantly less on each visit. Gap significantly reduced its sales expectations for the year, too.

Meanwhile, Dollar Tree and Dollar General expect better sales as the year progresses because of those factors.

Median wages have increased more than 6% from a year ago. But that’s had little effect on individual families, as prices of common goods have skyrocketed.