Interest in short selling of stocks related to consumer spending in the U.S. today shows the fastest pace in a year amid soaring inflation, writes Business Insider.

According to S&P Global Market Intelligence, short selling of stocks related to consumer spending increased as inflation rose to a 40-year high.

Consumer spending is forecast to decline amid rising prices for primary and secondary necessities. Short-selling of stocks in the sector rose to 4.83%, the highest since mid-January 2021, as consumer spending is forecast to decline due to inflation.

For example, shares of apparel retailer Citi Trends, Big 5 Sporting Goods and electric car charging network operator EVGo made the list of 10 stocks whose positions declined the most over the past month.

According to the S&P Global report, the share of short positions in the consumer staples sector totaled 4.83%, the highest since mid-January 2021. Recall that this was when interest in so-called “meme stocks” like GameStop peaked. “An army” of retail investors countered with wealthy hedge funds short-selling such stocks.

It is well known that in short selling, an investor seeks to make a profit by selling the stock he borrowed, then buying it again when its price declines and taking the difference in price for himself.

The market is reinforcing the view that consumers are going to cut back on non-essentials due to the rise in inflation over the past year. You can see the same thing if you analyze economic data: the U.S. Consumer Price Index (CPI) rose 7.5% in January. Its highest rate in 40 years was achieved in part due to a spike in heating oil and electricity prices.

The reason for the rise in inflation was partly because the Federal Reserve’s extraordinary stimulus in response to the pandemic had reverberated through the economy. Rising prices of essential and non-essential goods are also weighing on consumer sentiment. Last week, for example, the University of Michigan reported that its consumer sentiment index for February fell from 79 to 76.2. The index fell because of falling economic expectations and because households earning less than $75,000 a year felt their financial situation worsen.

At the end of January, 2.11% of S&P 500 stocks were in the hands of short sellers and the share of short energy stocks rose to 3.38%, the highest since January 2021, while the health care sector saw its highest level since October at 4.04%.