London Daily

Focus on the big picture.
Tuesday, Sep 15, 2026

Inflation has stopped Americans from buying vehicles of all kinds — but they're still splurging on travel and good times

Inflation has stopped Americans from buying vehicles of all kinds — but they're still splurging on travel and good times

Despite US inflation at a 41-year high, people are still spending on travel-related expenses like flights and hotels.

Even though inflation is at a four-decade high, Americans are still spending big on travel and experiences.

The Consumer Price Index rose 9.1% over the year ending in June per data published this week, higher than the 8.6% over the year ending in May. The 9.1% rate — the highest since November 1981 — is affecting people's spending behavior.

Although some people are modifying how they spend their money like looking for cheaper alternatives amid high inflation, people are handing over lots of money on certain goods and services. Spending on travel and transportation has shot up this year, but on the other hand, people aren't spending as much on vehicles, consumer spending data shows.

The following chart shows the percent change from January 2022 to May 2022 in Personal Consumption Expenditures from the Bureau of Economic Analysis. The items and services in the chart are some of the things that have seen the largest percent increases in consumer spending during this period.


People are splurging on vacations and good times away from home despite higher prices, as travelers once again take part in "revenge travel." Expenditures on foreign travel were 68.4% higher in May than at the beginning of the year. Spending on air transportation is also almost 40% higher than in January. Additionally, people are spending more on accommodations as they buy hotel and motel rooms for their travel needs.

Monthly Personal Consumption Expenditures data is only available up until May. But with travel demand up as people vacationed for fourth of July and throughout the summer, it may be the case that travel continues to be a popular thing people dish out money on, even with the high costs consumers are facing.

Consumer spending for gas was also up in May from January, with a percent increase of 27.7% for gas and other motor fuel, mirroring skyrocketing gas prices over the last few months. However, Energy Information Administration and AAA data show gas prices have been coming down from their peak.

There are also goods and services that have seen personal spending decline from where they once were earlier in the year. As seen in the following chart, that includes various kinds of vehicles like motorcycles and new autos or light trucks.

People may not be willing to spend big on cars right now with monthly payments soaring. Data from Cox Automotive research shows the monthly payment for a car has reached a record high.


The above chart also highlights that spending is down from earlier this year for different kinds of repairs.

In general, people were spending more on services than goods in May — with spending on services rising $76.2 billion but falling $43.5 billion on goods from April according to the Bureau of Economic Analysis.

Newsletter

Related Articles

0:00
0:00
Close
HMRC Warns Nearly Seven Million Adults Are Unclear About State Pension Entitlements
UK Parliament Passes Sovereign Grant Reform Before Conference Recess
British Rail Passengers Gain Automatic Right to Switch Operators During Disruptions
Burnham Hosts Downing Street Business Summit as UK Fiscal Pressure Builds
Labour Government Moves to Challenge £72 Million in Reform UK Crypto Donations
UK Advertising Industry Warns Wider Junk Food Rules Could Put £1 Billion in Media Spending at Risk
Cornwall Opens Devolution Talks With UK Government Over Transport and Local Services
UK Parliament Considers Sovereign Grant Reform Setting Royal Funding at £99.9 Million
Trades Union Congress Calls for Income-Based Energy Tariff Funded by Higher Bank Levy
UK Prime Minister Rejects Second Scottish Independence Referendum
House of Lords Begins Scrutiny of Bill to Lower UK Voting Age to 16
Anthropic Says Claude Was Exploited in Weapons-Related and State-Linked Cyber Activity
Institute of Directors Urges UK Government to Avoid Business Tax Increases in Autumn Budget
Rising Gilt Yields Cut UK Fiscal Headroom to About £13 Billion Ahead of Budget
UK Economy Grows 0.4% in July as Services and Technology Activity Strengthen
UK Government Promises Clearer Student Loan Guidance After Repayment Backlash
Charities Warn Unpaid Carers May Die Before Receiving Government Compensation
Dover Unrest Prompts Review of UK Counter-Extremism Strategy
Celtic Summit Leaders Reassert Right to Pursue Independence From UK
NHS Records Busiest Summer on Record Amid Severe Heatwaves
Harrods Faces Potential £150 Million Compensation Bill Over Al Fayed Abuse Claims
UK Parliament Opens Debate on Landmark Assisted Dying Legislation
Metropolitan Police Investigate Reform UK Over Alleged Foreign Electoral Donations
UK Economy Expands 0.4% in July as AI Investment Boosts Activity
Bank of England Signals Caution on Rates as Inflation Pressures Persist
Tesco Alerts Police After Scammers Use Its Branding in AI-Generated Fraud
Lindy Cameron Appointed First Female Permanent Under-Secretary at UK Foreign Office
UK Government to Rewrite Student Loan Guidance After Mis-Selling Criticism
Welsh First Minister Warns Andy Burnham Government to Respect Devolution
Trump’s Falkland Islands Remarks Trigger New Diplomatic Tension With Britain
Reform UK Receives Record £72 Million Donation From Cryptocurrency Billionaires
UK Bans Imports From Israeli West Bank Settlements and Sanctions Supporting Institutions
Bayeux Tapestry Draws Large Crowds at British Museum
Cuts to International Aid Raise Concerns Over Fragile Overseas Health Systems
UK Airlines and Logistics Operators Adjust Capacity as Fuel Costs Rise
UK Mortgage Arrears Edge Lower in Second Quarter
UK Government Advances New Devolution Offers for English Councils
UK Parliament Begins Debate on NHS Governance and Single Patient Record Reforms
Andy Burnham Launches Number 10 North Devolution Initiative
UK Parliament Rejects Assisted Dying Bill for Terminally Ill Adults
UK Bans Goods From Israeli Settlements in the Occupied West Bank
UK Economy Grows 0.4% in July as Technology Services Strengthen
Metropolitan Police Continue Investigation Into Reform UK Political Financing
Chinese Crypto Entrepreneur Leon Li Identified as Seller of £190 Million London Mansion
Trades Union Congress Proposes Social Energy Tariff Funded by Higher Bank Surcharge
British Chambers of Commerce Calls for State Pension Triple Lock to Be Scrapped
Anthropic Says Claude Helped Disrupt Biological Weapons and Cyber Espionage Threats
UK Imposes Sanctions Over Israeli Settlements and West Bank Violence
UK Reimposes Sectoral Sanctions on Iran’s Aviation, Shipping and Energy Networks
UK Economy Grows 0.4% in July as AI and Programming Services Lift Activity
×