The Feast before the Famine?

The swing from spending on services to goods during COVID and then back towards services may be petering out.

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The Feast before the Famine?
Welcome to the Know the Difference Minute for Thursday, August 31st.
Real disposable income fell 0.2% in July while real spending bounced 0.6%. Real income and spending can’t walk separate paths forever. Incomes have tipped from slowing to falling while spending keeps getting a second wind. The swing from spending on services to goods during COVID and then the swing back towards services may be petering out.
Based on monthly data, inflation has slowed materially, especially with durable goods where we’ve had a few streaks of outright deflation. Across the board, prices are higher than they were a year ago, but inflation is about the rate of change of those prices, not the level of prices, so progress is being made.
For consumer spending, all good things must come to an end, but not yet. And it could happen gradually. Is this the feast before the famine?
I’m Brian Jacobsen, Chief Economist at Annex Wealth Management. That is your Know the Difference Minute.