As inflation rises, Americans are spending and Europeans are saving

Countries everywhere are feeling inflationary pressures from the Iran war, but Americans and Europeans are coping differently.

Rising energy prices pushed US inflation in May to its highest level in three years, but Thursday’s data showed that consumer spending remained resilient, thanks in part to larger tax refunds and rising stock prices.

Americans are spending on traveling and eating out, though they’re hunting for deals and deferring big purchases; many are saving less and reaching for credit cards.

Europeans, meanwhile, have “doubled down on frugality,” The Wall Street Journal wrote, saving more and spending largely on essentials. Inflation’s psychological toll runs deeper on the continent, owing to memories of wartime scarcity, and the Iran conflict-fueled inflation risks deepening consumer malaise.