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Consumer Spending Posts Steepest Monthly Drop on Record
Consumer spending plunged 13.6% in April, according to a Bureau of Economic Analysis (BEA) report released Friday. The $1.89-trillion monthly decline was the largest since the BEA began tracking the data in 1959.
April’s drop followed a similarly steep, revised 6.9% drop in March when the lockdown began. Spending has nosedived nearly 20% since February, before the lockdown to stop the spread of COVID-19 began, CNN reported. Conversely, savings as a percentage of disposable income rose to 33%in April. That compares to 13% in March.
Whether those savings translate into a bout of consumer spending as states reopen remains to be seen, though. CNN notes that economists predict it will take consumers some time to resume their normal spending habits, including discretionary expenses on items such as movie tickets or restaurant meals. Since millions of Americans have lost their jobs due to the pandemic, uncertainty on that point remains high.
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- ◦Economy
