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Consumers are becoming concerned about higher interest rates, Google data suggests

·Anchor, Editor-at-Large
·2 min read

Concerns about rising interest rates are starting to spread to Main Street, new data reveals.

Searches for "interest rates" have doubled in the United States from the start of the year, according to Google Trends analysis (chart below). The search interest among consumers shot up in April after a few months of being subdued, likely due to stock portfolios being walloped this year on rate creep fear and higher costs for credit and mortgages.

Consumers are searching for the term
Consumers are searching for the term "interest rate" more right now than any other time since 2004 besides the onset of the COVID-19 pandemic.

Fed hikes bleed through the economy in the form of higher interest rates on credit products like credit cards, mortgages, and business loans. Since the Fed’s first post-COVID interest rate hike in mid-March, 30-year fixed mortgage rates have risen by a full percentage point to over 5%.

The 90-day Google Trend for the
The 90-day Google Trend for the "interest rate" search term. (Google Trends)

A closer look at Google Trends shows that the "interest rate" search interest in May topped out on May 4, which was the day that the Fed enacted the largest single rate hike since 2000. At the press conference, Fed Chair Jerome Powell warned that Americans may experience some pain as the central bank attempts to cool demand in order to fight inflation.

Nevertheless, even as inflation, rising rates, and a more volatile stock market impact household net worth in recent months, consumers are still showing a solid appetite to spend.

A mask from the tv series
A mask from the tv series "Scream" is displayed at a store selling Halloween merchandise in Alhambra, California on October 23, 2017. (FREDERIC J. BROWN/AFP via Getty Images)

Disney, a bellwether of sorts from American habits, said in its latest earnings release this week that spending at its parks surged 40% compared to the same quarter pre-pandemic. Demand was the strongest for theme park tickets, food, and apparel.

EV maker Rivian, meanwhile, told investors this week it saw 10,000 pre-orders for its R1 vehicle after a March price increase. The average price of these vehicles: a lofty $93,000.

Consumer spending is also spilling over into cruise lines and the travel sector.

"We have fantastic occupancy," Carnival CEO Arnold Donald told Yahoo Finance Live, adding that pricing for cruise vacations remains strong. "People are having a great time. Carnival is doing very, very well."

Brian Cheung contributed to this post.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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