Inflation Strains Consumer Spending Growth
|Consumer spending has driven the remarkable economic growth we have seen this year. But there are signs consumers are starting to buckle under the weight of inflation.
Why it matters: Consumers continue defying economic analysts’ predictions that their spending ability was sapped.
By the numbers:
Be smart: While consumer spending was flat, consumer savings fell sharply in August. They have used credit cards and Covid-era savings to keep up with inflation, and their savings are likely depleted.
Bottom line: Inflation may have come down from 40-year highs, but it continues to weigh on consumers. It is critical that policymakers work to ease the burden of higher prices by avoiding overregulation, addressing the workforce shortage, and reducing tariffs.