The article discusses the current trends in consumer spending, particularly in the context of rising prices for travel-related expenses such as apparel and dining out. Despite the surge in demand for travel, as indicated by Delta Air Lines CEO Ed Bastian, there is a noticeable increase in prices for staples of travel like apparel and dining out, as revealed by the Consumer Price Index (CPI).
The CPI data for March showed a 0.4% increase overall, with an annual pace of 3.5%, surpassing expectations. This increase in prices is attributed to higher shelter costs, which rose by 0.4% in March and more than 5.7% from the previous year. Food consumed away from home has also become more expensive, rising by 0.3% month over month and 4.2% compared to a year ago, while apparel prices increased by 0.7% in March.
Despite these rising prices, there are indications from PYMNTS Intelligence data that consumers have been resilient in spending discretionary income on clothing. However, there are also signs of caution, with some consumers becoming more mindful of discretionary purchases in light of inflation and high interest rates.
Similarly, while dining out remains a popular expenditure for consumers, there are pressures evident, with average spending levels slightly lower and a decrease in the percentage of consumers making restaurant purchases compared to earlier in the year.
The article concludes by suggesting that as earnings season kicks off later in the week, more insights will be gained into consumer spending trends amidst rising prices and inflationary pressures.
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