Cooler but still well above normal this week

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The numbers are in and things look surprisingly rosy for the U.S. economy: 

The Federal Reserve is still cautious, but big brands – including Coca-Cola, Hilton and Visa — are singing praises to shoppers seemingly undeterred by companies' raising prices. What's more, Taylor Swift, Beyoncé and Barbie are enticing people to part with their money, bolstering local businesses.

Financial reports by corporations and government data have been painting a picture this month of insatiable American shoppers making companies positively exuberant.

This week, GDP or gross domestic product – considered 

measure of economic growth – showed the U.S. economy grew at a rate of 2.4%, much higher than expected. What's fueling it is — you guessed it — spending. Brand after brand this week boosted their earnings forecasts for the year, calling consumers "resilient" in the face of higher prices. 

Americans have been scaling back in some categories, including clothing and furniture, but we're splurging on travel. We're also going out to eat, and see concerts and movies. You could call it 

Plus, Taylor Swift and Beyoncé have been moving markets, quite literally. The Federal Reserve has tracked the striking effect of 

 One analysis estimates it could generate 

. When Beyoncé comes to town, hotels, hair stylists and bartenders all get a boost, 

. Hilton executives said people were spending more across all its hotels, from the humbler Garden Inn to the upscale Waldorf Astoria, with business travel picking up and overall demand exceeding available rooms. Hotel prices have been setting records too.  

"Not to be a Pollyanna at all, it all feels pretty good. ... I think the rest of this year's going to be very solid," Hilton CEO Chris Nassetta told analysts on Wednesday. "And I think next year will be a darn good year."

Companies test price limits in a 'Hot Profit Summer'

Higher prices showed up as good news in corporate reports across the board. Among them was Hershey (whose brands include Reese's and Skinny Pop). The company said people were buying slightly fewer snacks and candies, but

 (which makes Tide detergent and Crest toothpaste) and Colgate-Palmolive. 

Coca-Cola, like rival Pepsi, reported that shoppers remained loyal to brand-name soda despite several rounds of price hikes. 

Corporate execs offered many explanations for those hikes, including higher wages and other costs, such as sugar and corn syrup. Chipotle said it was still spending more on beef, tortillas, salsa, beans and rice, and did not rule out  additional price hikes later in the year. 

So how are shoppers paying for all of this? Part of it is going on credit cards; the Federal Reserve Bank of New York saying 

debt is at a record high. Banks report families are dipping into or even draining their pandemic-era savings. 

But there's more to the story: A lot of workers have gotten raises recently. For the first time in months, 

, as employers continue to compete for workers. This, in fact, raises the specter of the notorious 

, with companies citing higher labor costs as a major cause of higher prices, and then workers pointing to those rising prices as proof they need higher pay.

, which could signal that the labor market is softening. This is good news for inflation – which is now at 3% versus last year's 9% – but not enough for the Fed to ease up. It  

"Inflation has moderated somewhat since the middle of last year," Fed Chair Jerome Powell told reporters, explaining the decision. "Nonetheless, the process of getting inflation back down to 2% has a long way to go."

While the economy has remained strong amid months of interest rate hikes — and the unemployment rate near a 

 — the effects of the Fed's actions could still be coming. 

If they can cool off the economy just enough to stop companies from raising prices, but not so much that they lay off workers, the Fed will have achieved what economists call a soft landing.

"We're not there yet," said KPMG Chief Economist Diane Swonk. "The hope is certainly high that we could get there." 

NPR's David Gura contributed to this report.

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Alina Selyukh

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Stacey Vanek Smith

Economic data show higher prices and constant warnings of a downturn haven't slowed down American shoppers. The Fed is anxious. Companies are thrilled.

What recession? It's a summer of splurging, profits and girl power

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