The increase in income inequality in the US was mainly due to permanent changes in income, not just temporary fluctuations. By analyzing data on consumption and income, researchers found that predictable life-cycle changes and permanent shocks were the key factors driving inequality. Surprisingly, consumption inequality did not rise as much as income inequality during the 1980s and 1990s. This suggests that consumers can anticipate many long-term changes in their income, even if they seem unpredictable to economists.