Consumer spending was flat in May while incomes dropped for a second month as the impact of the government’s individual impact payments waned. Inflation, however, posted a sizable gain of 0.4%.
Consumer spending was unchanged in May, a marked slowdown following gains of 0.9% in April and a 5% surge in March that had been fueled by distribution of payments of up to $1,400 per individual from a $1.9 trillion stimulus bill, the Commerce Department reported Friday.
A much-awaited economic boom coming off the pandemic recession appeared to edge closer to reality Thursday with fresh data showing the pace of layoffs dwindling, consumers spending freely and manufacturing rebounding.
The latest barometers point to a U.S. economy that’s steadily regaining its health as vaccinations accelerate, business curbs are lifted in many states and more people are willing to travel, shop, eat out and otherwise resume their spending habits. Though many Americans who have lost jobs or income are still suffering, hopes are rising that the benefits of the recovery will spread further in the coming months to groups of people who have yet to benefit.
Consumer spending and personal incomes took a tumble in February, as severe winter weather gripped many parts of the US and the federal government finished its distribution of $600 relief payments. Despite the drops, the US Department of Commerce is forecasting a rebound this month as more Americans are vaccinated and many receive a second, larger round of COVID-19 pandemic aid.
In its “Personal Income and Outlays” report for February, the Commerce Department reported that consumer spending, which accounts for more than two-thirds of economic activity in the US, dropped 1% after a 3.4% rebound in January.
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