The ongoing Russia-Ukraine crisis and rising inflation haven’t stopped American consumers from opening up their wallets and buying things at the nation’s shopping malls and online retailers. That’s according to a Bureau of Economic Analysis (BEA) report released Friday.

Personal spending rose 2.1% in January and was ahead of market forecasts. That’s the most significant increase since March 2021 and was spread across all major categories and services.

According to the U.S. Census Bureau, new orders for durable goods rose 1.6% for January, up from 1.2% in December, and ahead of market expectations.

The solid personal spending numbers come a day after the BEA reported that gross domestic product grew at an annual rate of 7% in the fourth quarter. It was the highest growth since the second quarter of 2020 when the American economy began to recover from the COVID-19 pandemic, driven by a 23.6% rise in exports and 3.1% in consumption expenditures.

Wall Street warmed up to these reports, which helped turn investors’ attention away from the Ukraine crisis, with all major averages closing higher on Thursday and strengthening on Friday morning.

But the good news on the U.S. economy and the Wall Street rebound may not last for too long as the effects of the Russia-Ukraine crisis have yet to be felt around the world.

One of these effects is the worsening of food and energy inflation due to the disruption of the supply chain for two major commodity markets, grains and energy, according to Jack Bouroudjian, chairman of Global Smart Commodity Group.

“BBC estimates over 47% of the total energy imported by western Europe comes directly from Russia via pipelines which go through Ukraine,” says Bouroudjian. “The markets have already begun to see the effects of the measures taken by Moscow to control the flow of energy with spiking natural gas costs in many European countries. The other main commodity produced from the region which could find supply chain issues disrupted is the grain market.”

Kunal Sawhney, CEO of Kalkine Group, expects global markets will remain choppy over the next few weeks.

“Thursday’s attack on Ukraine has thrown up all sorts of possibilities that were unforeseen until a few weeks ago,” he said. “So, the markets will price in the Ukraine factor, given the disruptions it can cause to global supply chains.”

What should investors do?

They should come up with an investment policy statement, according to Robert Johnson, chairman and CEO at Economic Index Associates.

“All investors should establish an investment policy statement, likely with the help of a credentialed financial advisor who operates as a fiduciary. Investing without a plan is like driving without a roadmap or GPS. Investors should not concern themselves with broad market moves or the crisis de jour,” he said. “An IPS is a written document that clearly sets out a client’s return objectives and risk tolerance over that client’s relevant time horizon, along with applicable constraints such as liquidity needs and tax circumstances.”

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