US Commerce Department said in a statement later last week that its index for Consumer Spending dived by the most in ten months in February as a rare Texas winter storm alongside a deep freeze across the country had prompted a broad decline in US Consumer Spending, the lifeblood of US economy accountable for roughly two-third of the nation’s entire economic activity.
On top of that, waning of a boost stemmed off the $892 billion stimulus package passed in the US Senate later last year had also heaved consumers’ spending lower, while a large chuck of middle- and low-income households awaiting the mammothlike $1.9 trillion bill, which was signed off into a law by the US President Joe Biden earlier this month, had also weighed on February expenses.
Nonetheless, followed by the release of Commerce Department data, many analysts had claimed that the fall in Consumer Spending last month would more likely to be short-lived, as a disbursement of the $1.9 trillion in new pandemic relief aids would lift expenses higher this month.
US Consumer Spending falls by the most in 10 months on February
In tandem, according to US Commerce Department data, Consumer Spending that accounted for more than 66 per cent of entire US economic activities as beforementioned, dipped 1.0 per cent in February, largely due to a broad-based plunge in purchase of goods, while February’s steep downturn in US Consumer Spending on a year-on-year basis followed a 3.4 per cent rise in January, the Department added.
Aside from that, personal earnings took a tattering header of 7.1 per cent following an upsurge of 10.1 per cent in January. Meanwhile, citing that the February setback in Consumer Spending had been a momentary breakdown, a chief US economist at Oxford Economics in New York, Gregory Daco said, “The February pullback in income and spending is only a temporary blip.
We expect the combination of rising vaccination rates and a new round of stimulus checks from the largest COVID-19 stimulus package yet will provide a powerful lift to consumer spending in March. ”