On Friday, US Consumer Spending data released from the US Commerce Department had mirrored a painted veil on a dwindling US economy, as the US consumer spending had rebounded by the most in May, however, a sweeping slump in earnings alongside a likely second layoff wave amid rising pandemic cases across the United States suggested that the gains might be short-lived.
Apart from that the US Consumer spending in May accountable for roughly two-thirds of the entire US economic activities, other economic data revealed on Friday including a slump in consumer sentiment, had deepened analysts belief that the US economy had been well-poised to register its steepest pace of contraction over the second quarter of the year.
Besides, despite a record rebound in May US consumer spending, the Wall St. had barely responded to the data due to a spike in the numbers of pandemic cases across many parts of the United States including the heavily populated US states of California, Texas and Florida, stoking possibilities of a second layoff wave at a time while the unemployment benefit checks were scheduled to be run out by the first week of July.
Adding further strains, the US congress appeared to be utterly reluctant over a second stimulus package.
Huge pitfalls ahead for the US economy
Meanwhile, according to the US Commerce Department’s consumer spending data released earlier on the day, US consumer spending had surged by 8.2 per cent last month after a record decline of over 12% in April, the largest monthly rise since the Government had started off to track down the data back in the 1959s, however, an analysts’ poll was expecting a rise of 9 per cent in US consumer spending last month.
Nonetheless, as personal earnings had dropped the most since January 2013 by 4.2 per cent in May after a record upsurge of 10.8 per cent following the one-time $1,200 pay-check to each American adult, while consumer sentiment had pummelled last month over worries of a second layoff wave, several Wall St.
analysts said following Friday’s data that they were anticipating further glooms ahead for the US economy over the coming months.