Anyone who’s gone to the supermarket and the gas station knows that inflation is up. Wages are stagnant and this our real disposable incomes are going down. Ben Bernanke did QE2 to create inflation and get out of a deflationary cycle we were falling into. The problem is that by fueling inflation, he might knock the country back into recession and destroy people’s savings. Last month, inflation cut into consumer spending. In fact, people had to dip in their savings.
U.S. consumer spending rose for an eighth straight month in February as households tapped savings to cover higher food and energy prices.
Spending rose 0.7 percent in February after a 0.3 percent increase in January, and inflation accelerated at its fastest pace since June 2009, the Commerce Department said on Monday.
Adjusted for inflation, spending was up a far smaller 0.3 percent last month after being flat the prior month.
“The data provide yet more evidence that higher prices are denting economic growth,” said Paul Dales, a senior U.S. economist at Capital Economics in Toronto.
The increasing costs is putting a damper on people’s spending. As prices rise and wages don’t go up our living standards decline.
This is the Obama Boom!
Tags: Ben Bernanke, Consumer Spending, Infaltion
