As prices climb and paychecks remain the same, one would expect to see consumers tightening their belts, perhaps cutting back on luxuries or even some necessities.
One would expect.
But that doesn't seem to be the case. Big banks such as JPMorgan Chase have noted strong consumer spending in the face of inflation.
So what's going on?
Well, the past few days have given a big clue. On Tuesday, credit card processor Visa reported higher than expected quarterly earnings. The company earned $1.98 a share, much higher than the $1.75 expected by market analysts.
Visa's announcement follows a similar report from American Express on Friday.
Credit card companies are doing very well right well. That doesn't mean the economy is on the upswing and it sure as heck doesn't translate to good news for the public. People are still spending, but it's money they don't have in an uncertain economic climate. That could backfire and backfire big.
We have to think most Americans know better. But knowing and doing are obviously two different things.