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Originally Posted by Chick Webb
Those people who have lost their jobs will absolutely not be spending money. Vacations will not be taken, cars will not be purchased, homes and all the things in them will have to wait. In the locales where those people live (thousands in SF, for example), that means jobs that are dependent on them will start to bleed off. The people that those who've lost their jobs live and (used to) work with will start to fret about their own situations and cut back their spending.
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Quoting myself is a little meta, but I literally just saw this piece in the WaPo -
Americans are starting to pull back on travel and restaurants (In a worrisome sign for the economy, U.S. consumers are beginning to spend less on services)
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Retail sales slowed last month for the first time this year, driven by a 4 percent drop in car sales. U.S. flight bookings dipped 2.3 percent in May from a month earlier, according to data from Adobe Analytics. And both high- and low-income Americans have begun pulling back, particularly on services, in the past four to six weeks, according to an analysis of credit card data by Barclays. The slowdown in spending is now concentrated in services, not goods, the bank found in a new analysis of credit card data.
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and
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These early signs of slowdown across a broad range of products and industries, including travel and restaurants, challenge the notion that Americans have simply shifted their spending from goods to services. The hope until now had been that after two years of stocking up on products like cars, furniture and appliances, Americans would splurge more on vacations, dining out, manicures and other services they’d mostly put off for much of the pandemic.
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Consumer spending is 2/3 of our economy. So, this does seem a worrying trend, and the anecdotes in the story give you a good picture of the knock-on effects of inflation and job losses.