Mar 31, 2022 - Economy

Inflation-adjusted spending falls in February

Data: U.S. Bureau of Economic Analysis via FRED; Chart: Axios Visualsa: 

Rapid rebound patterns in the economy may be coming to an end as consumers face a slew of new concerns this year.

Catch up quick: Spending actually fell in the month of February when inflation is taken into account.

By the numbers: While spending rose by 0.2% last month from January, prices rose much faster — 0.6% over the same time.

  • Yes, but: Seasonal adjustments to data and high inflation have made the real PCE data series volatile.

The big picture: The Fed is simultaneously trying to fight inflation by raising interest rates while trying to maintain a level of consumer demand that won't tip the economy into a recession.

What to watch: Despite COVID fading as a concern, Russia’s invasion of Ukraine last month has now started to weigh on consumers’ minds, impacting consumer sentiment.

The bottom line: The economy’s in a tricky place right now and consumers are taking it all in.

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