Pandemic pummels US consumer spending to new record lows as savings hit all-time high



by   |  VIEW 1099

Pandemic pummels US consumer spending to new record lows as savings hit all-time high

On Friday, US Consumer spending data released by the US Commerce Department had reinforced analysts’ beliefs that the US economy might take years to scale up to a pre-pandemic level, as US consumer spending had hit a new record low last month, remarking the index’s second straight monthly decline, however, the American nationals’ savings had hit an all- time-high over the narratives of a pandemic-led forced closures.

More importantly, as US Commerce Department data on April consumer spending, the most-timely data to gauge the economy’s health accountable for roughly two-third of entire US economic activity, took a header of 13.6 per cent, marking up the index’s biggest slump since the US Government had started off to track the data back in the 1959s, while April’s slump in consumer spending followed a previous record plunge of 6.9 per cent reported on March this year.

In point of fact, since the US Commerce Department data on consumer spending had underscored that the US economy became almost entirely dependent on Government aid, while a record $3 trillion stimulus package appeared to have kept an ailing US business environment afloat, nonetheless, questions remained on how long the US Government would keep injecting fiscal stimulus amid a sheer reluctancy among the American nationals to rehire , since a substantial scale of improvement in consumer expenses had yet to reveal itself despite a gradual ease of the lockdown measures.

Record low US Consumer spending signals pessimistic business outlook

Meanwhile, as alongside a record low Consumer spending, this month had also witnessed a nosedive in US industrial activity to a post-World War I level, while the retail sales were plunged by a record 16.3 per cent last month with homebuilding data faltering to a multi-year-low, stoking fears of another Great Depression alongside a record flump in US GDP (Gross Domestic Products) over the second quarter of the year since the Great Financial Depression of 2007-09, referring to a growing weakness in US economy, a Chief Economist at Naroff Economics in Holland, Pennsylvania, Joel Narroff said followed by the release of April consumer spending data, “Right now, the economy is totally dependent upon the largesse of the government.

Will the federal government keep sending out checks or will the household and business welfare payments dry up?