"Higher prices, a constrained supply of goods, and a lessening of Covid fears led consumers to further pare back their purchases of goods while they continued to indulge in services," said Lydia Boussour, Lead U.S. "While inflation is taking a larger bite out of households' income, it is also encouraging a rotation of spending from goods to services which should help spur consumption growth in the months ahead," said Boussour. She added, "And the combination of robust labor income growth, record levels of household wealth, and ample excess savings suggest that consumer spending should remain well supported."