Former Assistant Secretary of the Treasury Monica Crowley talks about the strain inflation is having on the middle and lower classes on “The Bottom Line.”
Americans put the brakes on spending in January after the crucial holiday season as they continue to face high interest rates and soaring prices for everyday goods.
retail salesA measure of how much consumers spent on many everyday items, including cars, food and gasoline, fell 0.8% in January, the Commerce Department said Thursday. This was below both the 0.1% decline expected by economists in Refinitiv and the revised 0.4% increase recorded in December.
It was the worst month for retail sales since March 2023.
Excluding the more volatile readings for gasoline and autos, sales fell 0.5% last month.
Shoppers in Atlanta, Georgia, USA on Tuesday, February 14, 2023. (Photographer: Dustin Chambers/Bloomberg via Getty Images/Getty Images)
The January prepayment amount is not adjusted for inflation, so consumers may earn less for the same amount of money they spend.
a solid job market And in recent months, strong wage increases have helped boost consumer spending despite high inflation. But many economists predict that consumers will become more cautious as student loan payments resume and high interest rates affect the broader economy.
In addition, more Americans are relying on credit cards to cover everyday necessities.
Credit card debt surged to a new record at the end of 2023, but Delinquency is also increasing.
This is a developing story. Please check back for the latest information.
