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Consumer Spending Shifting Back To Services; Inflation Eats Into Incomes

Wolf Richter profile picture
Wolf Richter


  • Spending on services rose in May, but spending on goods fell – all adjusted for inflation.
  • Spending on durable goods continues to be handicapped by the ongoing shortage of new vehicles.
  • “Real” spending on services rose by 0.3% in May from April, and by 4.7% year-over-year, and by 1.2% from May 2019, having now edged past the pre-pandemic high for the first time.
  • Personal income from all sources and adjusted for inflation dipped 0.1% in May from April, and fell by 1.0% from a year ago when the stimulus money was still flooding into consumers’ coffers.

Balancing savings and spending

PM Images/DigitalVision via Getty Images

Some demand destruction due to high prices, particularly gasoline. Shortage of new vehicles not helpful for spending on durable goods.

Consumers have been shifting spending from goods back to services since last year, following the

This article was written by

Wolf Richter profile picture
Wolf Richter is the publisher of wolfstreet.com, a site focused on business, finance, and money. The site is free. In addition to the many years at wolfstreet.com and its predecessor site, he has 20 years of C-level operations and finance experience.

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