WASHINGTON (AP) – US consumer spending accelerated in August amid an increase in COVID-19 cases, even as rising demand and booming supply chains kept inflation down at a high level.
Consumer spending rose 0.8% in August, following a 0.1% decline in July. Revenue rose a smaller 0.2%, the Commerce Department reported on Friday. This suggests that consumers have tapped into their savings to increase spending on items like clothing and groceries, and to spend more online, even though the delta variant has forced them to forgo traveling and dining out.
Consumer prices rose 0.4% in August from July, the same increase as the month before. Inflation rose 4.3% last year, up slightly from the previous month and the highest in more than three decades.
Supply shortages of everything from computer chips and furniture to paints and chemicals have pushed up prices as the economy rebounding from the pandemic recession caught many businesses off guard.
Federal Reserve Chairman Jerome Powell said on Thursday that supply chain disruptions, such as stranded ports on the west coast and factory closures in Asia amid COVID spikes, have lasted longer. long than the Fed expected. Keeping prices stable is one of the Fed’s mandates, along with the search for as many jobs as possible.
Still, Powell said he expected supply chain problems to start improving next year, which would start to push inflation down in the first half of 2022.
There are early signs that spending rose again in September, as new cases of COVID began to decline. Spending on airline tickets rose in late September and total credit card spending rose in mid-September from the previous month, according to a report from the Bank of America.