A Rise in 'doom spending': Americans buying more to avoid future high costs

As the Trump administration continues its tariff policies, more Americans are spending money to get ahead of potential rising costs, and local experts are weighing in.

A recent CreditCards.com survey shows that about 20% of respondents are buying more than usual.

Of that group, 29% said fear of the tariffs has “greatly” impacted their decision to make purchases, while 37% said it’s having “some” impact.

Since November 2024, 28% of Americans have purchased goods costing more than $500 — including home appliances, home improvement materials, furniture and cars — and 21% say they plan to buy soon.

“There’s so much chaos surrounding the trade policy and what tariffs are in effect and which ones are not,” said Dennis Kaufman, professor and chair of the economics department at the University of Wisconsin-Parkside. “It’s just causing consumers and producers to pull their hair out trying to make a decision one way or the other.”

According to Kaufman, this year’s doom spending mimics consumer behavior during the COVID-19 pandemic, when people would spend money after staying home.0

“I think the ‘doom’ part of doom spending at least conveys to me the expectation that people are really anticipating an economic slowdown, if not an outright recession,” he said.

Indeed, recent data from the University of Michigan’s Survey of Consumers group indicated that consumer sentiment fell for the fourth straight month, falling 8% since March.

The index of consumer sentiment in the North Central region, which includes Wisconsin, also has decreased each month since January, although data is only available through March 2025.

“There’s a lot of worry about what’s happening, not only to prices, but also in terms of employment,” Kaufman said. “A lot of people are frozen in that they don’t know whether to do this or that.”

At the same time, recent reports from the U.S. Department of Commerce Bureau of Economic Analysis showed that imports and consumer spending on bigger, expensive goods such as cars increased during the first quarter of 2025, suggesting businesses and individuals made purchases to avoid increased costs from tariffs.

“The tricky thing is that consumers can say one thing, but what really matters is what they’re actually doing. Consumer behavior is what really matters,” Kaufman said. “This time around, it seems like what people were saying they would do was what they ended up actually doing. Their behavior followed in line with their concerns and their expectations.”

Main concerns

Eric Bernal, SVP Portfolio Manager at Johnson Financial Group, said he would describe doom spending as “hoping for the best and planning for the worst.”

For Bernal, tariffs are at the forefront of consumers’ main financial concerns.

“That information is very fluid, and it’s changing week to week, day to day, frankly,” he said. “I think the term of the year is ‘uncertainty.’ The rules of the game haven’t been laid out at the moment.”

Because of that, households and businesses do not know what to expect for the rest of the year, which hinders their ability to plan for the future.

“We’re very resilient. We’ve bounced back pretty much every single time, but it’s just a matter of being able to plan for the future,” Bernal said. “In order to plan, you like to know what the rules of the game are.”

The tariffs, or the possibility of tariffs, are causing some households to reevaluate their finances, which Bernal said is evident as individuals and businesses are purchasing more to prepare for higher prices in the future.

“No one knows exactly what’s going to happen with the tariffs and what contracts get negotiated and whatnot, but you can see households as well as businesses … increasing inventory because they’re just not sure what prices may look like six months, nine months (or) 12 months down the road,” he said.

Though tariffs are adding to economic uncertainty, it’s only one factor of consumers’ fears.

Businesses, too, are experiencing this uncertainty as some question whether to expand or invest, Kaufman said.

“It’s hard to hire new people today if you think you may have to turn around and lay them off in a month or so,” Kaufman said. “It is just forcing people to take a wait-and-see attitude in terms of business expansions and hiring and spending.”

Workers also might be worried about their jobs, according to Kaufman.

Though there was a high demand for workers following the COVID-19 pandemic, making it easier to find a new job, “that may not be the case going forward,” he said.

“Unemployment could be rising here, and that’s going to cramp people’s incomes and cause a lot of angst among ordinary households,” he said.

Why doom spend?

For Kaufman, doom spending is in some ways “a natural human reaction,” although consumers’ specific response depends on their personal situations.

Now, Kaufman said, “we have a fork” between people who can afford to spend and those who cannot.

“There are some people that may go ahead and say, ‘I can afford it,’ and usually it is going to be the wealthy that can pay the higher prices,” he said. “Their sense of doom isn’t as acute as it is for someone who’s working in a lower paying job, whose employment is tenuous.”

Still, Bernal said care for family is one driving factor of doom spending.

When faced with their household budgets and high levels of uncertainty, consumers want to plan for the worst, he said.

“You’re always going to have that bell-shaped curve. You’re going to have the one tail end that are going to plan for the absolute worst, and you’ll see some of that doom spending,” he said. “You’ll see the other tail of the curve — the very optimistic individuals, where they’ll think we’ll just work our way out of it just like we have in the past.”

Though preparing for the future is often considered a good thing, doom spending can have negative consequences.

For instance, some households might spend beyond of their means in the short-term, instead of spreading the cost over time.

“That could throw off your household budget,” he said.

Doom spending also could have some negative effects on the economy, he said.

In the first quarter, the economy saw higher levels of buying and spending in the short-term.

“If we’re seeing that right now, that could potentially create a gap in spending in the future because a lot of that demand is being pulled forward,” Bernal said.

Bringing that demand forward could skew future numbers, he said.

“I think over the long-term we would be fine, but it may create some short-term volatility in economic growth,” he said.

Going forward, Bernal said consumers should stay flexible and make sure their households are staying financially fit.

“They need to take a closer look at their budget,” he said. “They need to take a look at all of their financial resources, and they need to utilize those resources — and in a very calculated way.”

As seen in JouralTimes.com