According to the company's earnings reports, market data analysis, and consumer opinion surveys. The Bureau of Labor Statistics said on Thursday that inflation reached 8.2% in September of this year, clinging to its highest level in four decades.

High inflation rates and multiple interest rate hikes by the Federal Reserve affect consumer behavior.

Most economists expected the inflation rate in September to be 8.1% year-over-year, after an annual inflation rate of 8.3% in August. The cost of living rose by 0.4% from August to September.

But the "core" numbers that exclude volatile food and energy prices rose by 0.6% monthly when Wall Street forecasters expected a 0.4% increase. The Dow Jones Industrial Average ended Thursday up more than 800 points as stocks saw a huge rebound after the hot inflation reading.

The S&P 500 and Nasdaq Composite indexes also closed higher. Due to rising living costs in recent months, millions of people have already taken steps to save their money, according to a recent report by McKinsey & Co.

Which explored the ways people shop. "Whether at gas pumps or grocery stores, people across the United States felt a tightening in their pocketbooks this summer," it said.

"Inflation is at its highest level in decades, and consumers are worried and stressed." "Consumers also tend to differ more on inflation expectations than experts do, they change their views less often, and often rely on a few key products they regularly consume." Carlo Bizzinelli, IMF said McKinsey that with inflation rising to its highest level in 40 years.

"The mood has turned gloomy. Thirty percent of respondents said they feel pessimistic, and that we may be heading towards one of the worst recessions we have ever seen." Inflation has become a stark reality for some people, especially when shopping for food – like a California woman who said she buys fewer vegetables or freezes them to get more bang for her buck.

Carlo Bizzinelli, an economist at the IMF Research Department, said that once consumers decide that inflation is a problem and is here to stay, it is less likely that economists will change their minds compared to economic experts. "Consumers also tend to differ more on inflation expectations than experts do; they change their views less often, and often rely on a few key products they regularly consume – like coffee and gasoline – to extrapolate changes in overall cost of living."

Consumers are changing their behavior • Three-quarters of consumers said they are engaged in some form of bargain hunting, and 60% of them are adjusting the quantities they buy. This means either choosing bulk quantities at lower unit prices or smaller quantities.

Some retailers seem to be reaping the benefits: Costco Wholesale – which can sell groceries in bulk in addition to a $1.50 hot dog combo – and soda – had a strong September, with comparable sales rising 8.5% over the same point last year. • Forty-four percent of respondents told McKinsey they are delaying non-essential purchases. Low-income shoppers tend to put some groceries, home improvement, shoes, and clothing purchases on pause.

Consumers are looking for deals on clothing and shoes, buying in bulk to achieve volume savings, delaying purchases on non-essential items, and turning to lower-priced retailers. – McKinsey & Company research • More than a third (37%) of those surveyed by McKinsey said they are switching retailers for lower prices or discounts.

McKinsey noted that they are also looking for price drops from private-label brands and using "buy now, pay later" programs. Some retailers have already rolled out deals. In late September, Nike announced price-cutting efforts to help clear out off-season apparel from warehouses, with executives at the sportswear giant expecting competitors to do the same. During an earnings call in August, Dollar General CEO Todd Vasos reported a more diverse customer base, including income levels of $100,000 and above.

"We really encourage seeing a younger and a bit wealthier consumer," he said. Many people plan to cut back on dining out, travel, electronics, as well as toys and games, as they learn to live with the insecurity that rising prices bring.

Three-quarters of consumers hold a bleak view of discretionary spending, according to a separate survey conducted by Numerator last September, a consumer markets and analytics firm. Many people already know where they plan to cut back – starting with dining out, travel, electronics, and toys and games – as they learn to live with the insecurity that rising prices can bring.

Earnings season will give economists a better idea of those sentiments. Third-quarter earnings results are also set to start rolling out on Friday, providing another view on customer spending – and whether companies are maintaining their profit margins.

Editing: Yusra Bamtarf