The Bureau of Labor Statistics released the 2021 version of the Survey of Consumer Expenditures today. It's not complete, but it has all the major categories. The chart below shows the growth of consumer expenditures in 2019, 2020, and 2021:
Income was down 1% in 2021 while total expenditures were up 4.2% Both figures are adjusted for inflation, which amounted to 4.7% in 2021.
There are, obviously, lots of expenditure categories that were down in the pandemic year of 2020: food, restaurants, apparel, personal care, education, and others.
But 2021 was a different story. The amount spend on homes and education were down a bit, but that's all. Every other category showed an increase. The largest were in food, restaurants, apparel, transportation, entertainment, and personal care.
Those are the basics. More analysis to come, I'm sure. The basic good news is that even during the second stage of the pandemic, incomes remained about flat and expenditures were up substantially. That's what saved our economy, and it's largely due to Joe Biden's $1.9 trillion stimulus at the beginning of the year.
Sure looks like if you're wondering where inflation came from, it was people in 2021 saying "I'm tired of being cooped up inside; time to spend!"
When income has increased only 1% inflation was not due to workers being overpaid. Despite all the talk of labor tightness, workers are not getting large raises and if employers want more employees they are not willing to pay good wages to get them.
Inflation is currently due to special factors: stimulus money, catching up on some kinds of buying, supply-side problems, oil price. It is not due to an "overheated" economy or to uppity workers pushing costs up through wage demands. Raising interest rates do not address the problems, which are mostly temporarily (oil price increases can occur at any time for various geopolitical reasons).
+1
Sorry, income was down 1%, not up.
'Inflation' is something of a reification and I wish people would stop treating it as a unitary thing. Yeah, like that'll happen when it's such a convenient cudgel with which to bash your opponents or as a pretext for forcing unpopular policies on the public.
OT: I think we can confidently conclude that Russia had finally hit its culmination point last month in its war with Ukraine.