Inflation not stopping Americans from spending big

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(NewsNation) —Americans are dishing out large sums of money on Mother’s Day, the Kentucky Derby and Formula 1 race this week as record inflation is showing no signs of preventing people from opening their wallets.

Some this week are spending up to $100,000 on a Formula 1 themed room in Miami. In Kentucky, millions are being pumped into the economy this week by derby visitors.

Inflation is at a four-decade high, the Federal Reserve just raised interest rates on borrowing and prices at the gas station, grocery and department stores have spiked.

But Americans are still spending their money, thanks to higher wages, a robust job market and a want to get out and spend after spending years locked away because of the COVID-19 pandemic.

Economists worry this spending splurge could be a red flag of things to come.

“We’ve had strong job growth but we won’t continue to see that, we don’t want to continue to see that,” said Cecilia Rouse, chair of the Council of Economic Advisers.

Democrats including President Joe Biden touted April’s strong jobs report, which showed the U.S. gained 428,000 jobs, as a sign the economy was doing strong.

Republicans pointed back at inflation, interest rates and gas prices as a signal the economy was not doing well.

Political jostling aside, economists are concerned all these economic ingredients could be baking a poor economic future.

“We just heard the April jobs report was quite stellar, but the thing economists are concerned about right now, and by extension the market is concerned about right now, is as the Fed hikes interest rates that’s going to slow the economy and the question is what’s that going to do to companies,” said Sylvan Lane, a financial reporter for The Hill on NewsNation earlier this week.

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