Wary about inflation, interest rates, North Carolinians adjust lifestyles to cut costs :: WRAL.com

North Carolinians are largely downbeat on the economy and how it might affect their families over the next year, according to a WRAL News poll. And as inflation puts a squeeze on household budgets, many in the state say they’re cutting back on some activities to accommodate cost increases.

Forty-six percent of respondents said they’re pessimistic about the economic outlook for their families, while 38% were optimism. Democrats and Republicans cited inflation as a major fear. Sixty percent of respondents said they are very concerned about the impact of higher prices on their household, while 32% said they were somewhat concerned.

The WRAL News poll of 1,100 adults was conducted in partnership with SurveyUSA between June 8 and 12. It reported a credibility interval from 2.3 to 3.8 percentage points depending on the question asked. A credibility interval is similar to margin of error but takes into account more factors and is considered by some pollsters to be a more accurate measurement of a statistical certainty.

Results of the poll come as borrowing costs are poised to rise. The Federal Reserve on Wednesday aggressively raised its key interest rate—a move that, while meant to temper the rise of inflation, would likely increase the cost of certain loans and further strain spending for some consumers.

State lawmakers, meanwhile, are debating ways to offer relief to residents.

economic strains

“Gas, food, clothes, even mortgage. It’s getting crazy,” said Ronnie Enoch, a Morrisville resident who says he’s reprioritizing his spending. “I am looking at things I have to do to change. I have to take money from over here to pay bills over there.”

The nation’s economy, which showed signs of strength early in the year, has cooled in recent months.

Russia’s invasion of Ukraine led to restrictions that restricted oil and gas imports, sending prices at the pump to record highs across the nation and the state. Inflation has also sent prices for groceries and other goods surging.

Consumer prices increased 8.6% in May, the fastest pace since 1981 and faster than April’s year-over-year surge of 8.3%, the Labor Department said Friday.

The stock market, meanwhile, plunged early this week on expectations that the Fed would raise its benchmark short-term rate. The central bank on Wednesday raised the federal-funds rate by 0.75 of a percentage point, the biggest increase since the early 1990s

Optimistic jobs reports for North Carolina, plus low unemployment and strong consumer spending in recent months have illustrated the resilience of the state’s economy. But the WRAL News poll’s results could foretell a shift.

Changing habits

To deal with the rising costs, many in the state say they are driving less, cutting back on eating out and participating in fewer activities or events, the poll shows. A sizable number of residents are also scaling back at the grocery store and canceling or delaying travel plans.

Garrett Cullen of Cary says he and his family of four are hunting for discounts, being more judicious about driving, monitoring credit-card spending and eating out less. He’s worried about the direction of the economy and what the second half of the year might bring.

“What’s going to happen when we get to Christmas,” he said. “Are people going to be tapped out? Are they going to be ready to buy gifts and all that stuff by then? We’ll have to see. It’s going to depend on where gas prices are.”

The results show that Democrats and Republicans have been affected similarly by inflation, but they had different views on what the future has in store.

Half of Democrats said they were optimism about the economic outlook for their families in the next year, while just 29% of Republicans felt similarly. Meanwhile, 61% of Republicans and 32% of Democrats said they were pessimistic. Only one in ten respondents said they weren’t making any changes in response to higher costs.

In response to rising costs, 72% of respondents said they’ve cut back on eating out, 61% have driven less and 60% have scaled back on activities and events. Forty-five percent reported canceling or delaying vacations and travel, while 44% said they’ve cut back on food and groceries.

Legislative efforts

Legislative Democrats have floated several proposals, including an increased childcare tax credit, increased funding to make school meals free for more students, and a gas tax rebate for everyone 18 and over with a drivers license in the state. At a news conference on Wednesday, they talked about them.

None of those proposals to win support from Republican candidates are likely, who control the General Assembly.

GOP lawmakers have said they’re interested in some form of income tax relief, even a possible rebate, but the party would be less inclined to support a gas tax rebate. “I would like to see something that’s a little more broad-based and long lasting as opposed to a temporary thing that may help with one tank of gas or two,” Berger told reporters earlier this month.

Sen. Jay Chaudhuri, D-Wake, said that’s unfortunate since tax cuts often don’t help low-income households.

“Inflation is contributing a lot to the needs we’re hearing from families,” Chaudhuri said at the Wednesday news conference. “Those are real pieces of legislation that I think can impact the bottom line and the crunch that families and children are feeling.”

WRAL Capitol Bureau Chief Laura Leslie contributed to this article.