If you think inflation is cutting into Americans’ spending, just wait to see what higher rates will do.
The Commerce Department on Friday reported that consumer spending rose 0.4% in August from July, after slipping 0.2% the previous month. However, the Commerce Department’s measure of consumer prices, which also happens to be the Federal Reserve’s preferred measure of inflation, also rose 0.3% in August. So real, or inflation-adjusted spending was up just 0.1%.
