Inflation threatens Latinos' buying power
Latinos in the U.S. are less optimistic about the economy than they were a year ago as inflation threatens to cut into their buying power.
Why it matters: Latinos have been economic growth drivers for the past decade, opening new businesses at faster rates than other groups and increasing their homeownership rates. The group's overall output would make them the seventh-largest GDP in the world if they were a country.
- Latinos have helped prop up the economy as both laborers and consumers, even when they are generally underpaid, have less access to business funding and lack savings, according to studies.
- As a result, the percentage of survey respondents who said they’re better off than last year fell from 62% to 59%, while those who said they expect to be better off financially in 2022 dropped from 78% to 70%, according to the Hispanic Consumer Sentiment Index.
- Hispanic confidence was somewhat stable in the last year.
- Latinos make up more than 18% of the population, so their change in outlook could foreshadow how the rest of Americans rethink spending their money.
Between the lines: A Bank of America study from late last year found people of color in the U.S. and low-income households, especially Black and Latino families, usually spend more of their income on staples that are prone to price increases, like food and gas.
- They also still tend to use cash more often, as they often lack bank accounts or have to pay more in bank fees when they do have one, making them more vulnerable to rising prices.
What to watch: Inflation was the fourth greatest concern for Latinos in the U.S. in December, per an Axios/Ipsos with Noticias Telemundo poll.