Inflation (mostly driven by corporations looking to increase profits off the backs of their customers) is starting to have a significant impact on spending.

Leslie Patton, Bloomberg »

Despite surging inflation, shoppers kept spending thanks to income gains and government stimulus. But those benefits are waning, and now Americans are skimping, even on everyday items such as toilet paper and toothpaste. More insights on the economic environment come on Wednesday with the release June’s consumer price index. That measure is anticipated to show annual inflation slowed to 3.1%, its lowest level since March 2021.

“The strains that the consumer is under have been exacerbated over the last couple of months,” said Morningstar analyst Erin Lash. The reduction of food assistance programs, lower tax returns and using up extra savings and stimulus funds have an impact, she said.