U.S. Consumer Spending Soars with Highest Gain in Nearly Two Years, Inflation Picks Up

Americans saw a major jump in consumer spending in January 2021, the biggest gain in nearly two years, according to a new report from Reuters. The increase was driven by a surge in auto sales, which rose to their highest level since 2006.

At the same time, the key Federal Reserve inflation measure rose 0.6%, more than expected, according to a report from CNBC.

However, analysts warn that the surge in consumer spending may not last. MarketWatch reported that consumer spending posted its biggest gain in almost two years, but cautioned that it is unlikely to continue.

High inflation is also taking a toll on Americans, according to Fox Business. The report found that inflation is costing the average American an extra $395 a month.

Meanwhile, the Fed’s favorite inflation measure, the personal consumption expenditures (PCE) index, skyrocketed in January, according to the Washington Examiner. The report suggested that markets are starting to realize that the Fed’s rate hikes are far from over.