Consumer spending, a main indication of the nation’s economic health, has remained strong despite rising inflation. Personal spending increased 0.9% in April, while March’s figure was revised to 1.4%. Obviously, people have been spending more on less due to sky-high prices. May’s figure will be released later in the week, but American businesses are noticing a decrease in clients.
Retail sales declined for the first time this year in May by -0.3%, despite the talking heads expecting a 0.8% rise. None of these numbers are adjusted for inflation because they do not want the public to see how bad the situation has become.
CPI rose 1% in May, up 0.3% from the month prior, but Americans are spending on the essentials. Shelter, gas, and food were the largest contributors, according to the Bureau of Labor Statistics. The all items index rose 8.6% in May, the largest increase since December 1981. Energy prices rose 34.6% over the last year, while food prices soared 10.1%, marking the highest prices since March 1981.
Americans are traveling less due to increased costs, as flight bookings dropped 2.3% from May to April. Travel costs, in general, has risen by over 30% YoY, and the average person may opt to forego this luxury expense. Keep in mind that the travel and hospitality industry has already been struggling for three years. Salons, restaurants, and all businesses have been forced to raise their prices, and consumers are beginning to see a decline in bookings across the US. The average consumer is simply spending on the necessities to keep afloat while items outside of food, shelter, and gas are rapidly becoming luxuries.