Consumer spending plunges record 13.6 percent amid coronavirus
Consumer spending dropped by a record 13.6 percent in April amid the economic fallout of the coronavirus pandemic, according to data released by the Department of Commerce on Friday.
That 13.6 percent drop represents a decrease of $1.89 trillion in personal consumer spending, according to the data.
By comparison, personal consumer spending increased 0.4 percent in both December and January and grew 0.2 percent in February before dropping 6.9 percent in March.
The report also found that personal incomes increased by an estimated 10.5 percent, which reflects unemployment benefits and stimulus checks obtained by citizens through the $2.2 trillion CARES Act.
However, wages and salaries dropped by $740 billion in April. Government-supported income jumped by an annualized $3 trillion.
Since March, more than 40 million Americans have filed initial jobless claims.
White House economic advisers have said that in the second half of the year starting in June the economy will begin recovering as states begin reopening.
However, it’s unclear how much of the pandemic’s economic impact will become permanent: According to a recent study from the University of Chicago, 42 percent of coronavirus-related job losses aren’t expected to come back.
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