BILS - The Spike In Inflation Is Not A Concern - Yet

• The effect of this year’s stimulus has petered out after a few months. The primary driver of this inflationary spike is supply bottlenecks rather than increased demand.
• The inflationary spike this year has actually caused the average real hourly wages for nonsupervisory workers to decline slightly. This will create a problem for consumer spending if it continues much longer.
• Consumer price inflation is not a big deal if it only lasts another month or two. But if the trend continues longer than that, it will begin to impact consumer spending and it will get the Fed's attention.

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