Cramer says economic data can’t capture one powerful factor in inflation

CNBC’s Jim Cramer said on Thursday that a huge driver of inflation is the desire of consumers to spend money on economic recovery – a fact that is not reflected in the data that the Federal Reserve and Wall Street are scrutinizing.

“They don’t care about higher rates. They have savings because they haven’t done anything for two years.” he said. “My main concern right now is that the aggregate data fails to capture the nature of this… one-time euphoria.”

Shares fell on Thursday after a strong start to the week that faded by Wednesday. Investors are looking forward to Friday’s nonfarm payrolls report to gauge the size of the next Fed rate hike.

If job and wage growth turns out to be stronger than expected, the Fed is likely to continue its aggressive campaign.

While a surge in travel this summer showed Americans eager to make a rematch journey after Covid restrictions were eased, some are also now experiencing “recession fatigue” — a waning motivation to continue making smart financial decisions to prepare for the tough economic times ahead.

Cramer noted that he expects consumers’ need to spend to decrease over time, although this may not happen anytime soon.

“In a year there will probably be no euphoria. Everything will end. They will spend their extra savings. And that’s when interest rates are likely to be at their highest,” Cramer said.

Jim Cramer on the

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