Powered by (Formerly) Huge Gains from Real Estate, Stocks, Cryptos, as “Real” Incomes Lag? “Real” Consumer Spending Rises, Spending on Services Jumps

By Wolf Richter for WOLF STREET.

Americans outspent inflation by a good margin in April. “Real” spending on goods – what consumers buy at retailers, adjusted for inflation – rose for the month but was down from the stimulus-miracle peak last year. “Real” spending on services (such as healthcare, travel, entertainment, etc., adjusted for inflation) jumped, after having collapsed during the pandemic, as the shift in spending from goods back to services continues in a sign that the distorted stimulus-economy is normalizing. Services spending is the biggie, accounting for over 60% of total consumer spending.

“Real” spending rose, approaching pre-pandemic trend.

Inflation adjusted spending on goods and services jumped 0.7% in April from March, to a new record, and was up 2.8% from stimulus-miracle April last year, according to the Bureau of Economic Analysis today. It is now approaching the pre-pandemic trend, as the consumer economy is normalizing at pre-pandemic growth rates, all adjusted for inflation: