Target Corp and Walmart Inc have been slashing prices to clear overstocked warehouses, while hotel revenue is surging as daily room rates and occupancy have surpassed pre-pandemic levels.
Used car prices are no longer rising at the blistering speed that fueled the COVID-era inflation spike, but airline fares are still climbing at a staggering 33 percent per year as of April.
According to data from reservation site OpenTable, the price of restaurant meals is rising, although there is no sign of a demand slowdown.
The Federal Reserve and the Biden administration had hoped that the anticipated shift in spending from a COVID-lockdown splurge on goods to in-person services would dampen price hikes. After all, supply-chain constraints that kept commodities off the shelf and spurred price spikes through scarcity have a less impact on services.
Instead, inflation pressure is being shared across the two sides of American consumption, with the more wage-sensitive service industry fighting for workers to fill openings considerably above the national job opening rate.
The ‘great rotation’ has so far provided no clear cure for the Fed, as well as Democrats concerned that inflation may cost them votes in November’s mid-term elections.
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