Prices continued to rise in March causing Americans to reach deeper into their pockets, according to new data released today by the Commerce Department‘s Bureau of Economic Analysis.
The Commerce Department said on Friday that the personal consumption expenditures (PCE) price index rose 6.6% for the year ended in March, reflecting increases in both goods and services. The PCE price index, often billed as the Federal Reserve’s favored inflation metric, also found that energy prices soared 33.9% while food prices increased 9.2% in March.
Excluding food and energy, the PCE price index for March increased 5.2% from one year ago, a slightly slower pace than the 5.3% recorded in February.
Within footwear, prices are also hitting record highs. Footwear prices grew 6.6% in March, year over year, according to Footwear Distributors & Retailers of America (FDRA) data released earlier this month. This marks the third-fastest year over year increase in about 33 years, trailing behind February’s 7% increase and May’s 7.1% increase. Men’s footwear was up 5.1%, women’s was up 5.8% and kids’ was up 11%. The spike in kid’s footwear marks the second highest spike in 33 years.
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These rising prices in footwear can be attributed to a variety of factors, especially heavy tariffs on consumer goods like footwear. The FDRA has continuously pressured the Biden Administration to eliminate the burdensome tariffs that have contributed to soaring prices on footwear.
And, according to the Commerce Department, this rise in prices have translated to consumers spending more in March. Personal consumption expenditures increased by 1.1% in March to $185 billion, reflecting an increase of $114.6 billion in spending for services and an increase of $70.4 billion in spending for goods, the Commerce Department said.
Within services, increases in spending were widespread across all subcomponents and led by “other” services, which includes international travel, as well as food services and accommodations. Within goods, an increase in nondurable goods, led by gasoline and other energy goods, was partly offset by a decrease in spending on durable goods, ed by motor vehicles and parts.
This isn’t the same case in footwear, however. According to a recent survey from the FDRA released earlier this month, almost half (48%) of footwear consumers plan to spend less on shoes this spring than last year. The survey, which was conducted by Emerson College Polling in partnership with the Fashion Footwear Association of New York (FFANY), also found that 49% of shoe shoppers are putting off footwear purchases because of inflation.
This news comes a day after the Commerce Department said that the economy retracted in the first quarter of 2022. Real gross domestic product (GDP) decreased at an annual rate of 1.4% in Q1, according to the “advance” estimate released by the Bureau of Economic Analysis. This follows a 6.9% increase in GDP In the fourth quarter of 2021.
According to the Commerce Department, the decrease in real GDP reflected declines in private inventory investment, exports, federal government spending, and state and local government spending, while imports, which are a subtraction in the calculation of GDP, increased.
