COLORADO SPRINGS — This week’s retail sales numbers from the Bureau of Labor Statistics is out and it’s clear, that consumers are starting to push back because just about everything is more expensive.

“When I first started to get concerned about inflation over a year ago, about 20% of the goods used to measure the Consumer Price Index had elevated prices,” Economic Expert Tatiana Bailey said. “Now, fast forward to today and we have 80% of the goods showing elevated prices, as can be seen by the data released by the Bureau of Labor Statistics.”

This is very different from the inflation period in the 1970s which was driven primarily by one good, oil prices. Now there are still persistent COVID lockdowns in China as well as supply chain bottlenecks at ports. According to Bailey, this is all seeping into consumer confidence.

“In fact, June sentiment was about 41% lower than it was in June of 2021,” Bailey added. “Now what I’m increasingly concerned about, besides the demand destruction that’s already occurring, is the fact that the interest rate increases alongside the consumer confidence that’s lower have translated not so much into lower purchases up until recently. So we have demand destruction, we have increasing interest rates, and a Federal Reserve that has absolutely no choice but to aggressively increase interest rates in order to stamp down on inflation.”

Bailey is watching closely the fact that savings rates are almost half of what they were pre-pandemic and increasing credit card delinquency rates.