Consumer Spending Is Not the Cause of the Current Inflation

A shopping cart in a supermarket as inflation affected consumer prices in Manhattan, New York, on June 10, 2022. Andrew Kelly/Reuters

Commentary 

In the United States, consumer spending is increasing not from a rise in income but from a rise in consumer debt. Last November, consumer spending financed by new debt rose at an annual rate of 7.1 percent, which exceeds the 4.8 percent annual growth in average hourly earnings for the month.