The Searing Memory of Lockdowns May Have Changed Consumer Behavior
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The record crowds thronging auto shows around North America could indicate that consumers who lived through mandatory government COVID lockdowns have changed their attitudes about financial security vs. current consumption forever.

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A record crowd of potential buyers at the Canadian International Auto Show in Toronto, February 19, 2023.

And if that’s true, conflicting data about where the global economy is headed may start to make a bit more sense: Aggressive consumer spending could remain a significant heat source for inflation even under painful economic circumstances that would have tightly closed previous generations’ wallets. 2022’s soaring interest rates and capital market calamities – along with a withdrawal of significant COVID-era government largesse – were expected to cool inflation and potentially lead to a “hard landing” recession.

But in the same way people who lived through the Great Depression developed a habit for uncomplaining thrift, it seems that consumers have learned two important lessons from the unprecedented national and local government  COVID clampdowns:

1)      What you have can be taken away at any time by government diktat, and

2)      If life is that short and unpredictable, delaying gratification through work and sacrifice makes a whole lot less sense than it used to.

Record crowds have been thronging auto shows in DetroitChicago, and Washington DC in recent weeks and were acting more like hungry buyers than reserved browsers. Clipboard-toting automaker reps at Toronto’s Canadian International Auto Show seemed under siege from crowds so thick the escalators shut down in protest, and the overheard snippets of dialogue were about prices and availability for ordering.