Higher interest rates continue to squeeze the finances of most households in the run-up to Black Friday, according to the latest Altron FinTech Household Resilience Index (AFHRI). The AFHRI showed that 11 of the 20 constituent indicators had declined year-on-year, and nine had declined since the last comparable quarter before the pandemic. The index also concluded that the downward trend in the financial resilience of households would have been more pronounced without the increase in employment in both the private and public sectors. However, the positive employment effect was not matched by total remuneration levels in the private sector, which weighed on the AFHRI given the declining year-on-year trend and high weighting amongst the composite indicators of the Index. [99d20fab]
The findings of the AFHRI highlight the ongoing challenges faced by consumers due to high interest rates. As households prepare for Black Friday, a significant shopping event, the financial strain caused by these rates is likely to impact consumer spending. With 11 of the 20 indicators showing a decline year-on-year, it is clear that many households are feeling the squeeze.
Black Friday is a popular shopping day known for its discounts and deals. However, the AFHRI suggests that consumers may have limited purchasing power due to the financial pressure caused by high interest rates. This could result in reduced spending during the event, affecting retailers and the overall economy.
It is worth noting that the AFHRI also acknowledges the positive impact of increased employment in mitigating the decline in financial resilience. The rise in employment in both the private and public sectors has provided some relief for households. However, the report highlights that the positive employment effect has not been matched by total remuneration levels in the private sector, which has further contributed to the financial strain on households.
In conclusion, the AFHRI indicates that consumer spending is still being squeezed by high interest rates ahead of Black Friday. The decline in financial resilience, as shown by the index's indicators, reflects the challenges faced by households in managing their finances. While increased employment has provided some relief, the lack of growth in total remuneration levels in the private sector has added to the strain. As Black Friday approaches, it remains to be seen how these factors will impact consumer spending and the overall economy. [99d20fab]