Consumer Spending Sees Big Rebound in May
June 26, 2020
Americans were eager to shop in May, following months of government-mandated lockdowns to halt the spread of coronavirus. Household spending on goods and services rose by a record 8.2% in May. The spending surge was led by long-lasting items like furniture and home appliances.
While the big jump bolsters hopes that the economy will recover quickly, consumer spending remains down 12% from February. Still, a partial recovery has many economists feeling more optimistic about Americans’ eagerness to spend, especially when unemployment remains historically high.
It remains unclear how much of the spending surge is being boosted by government stimulus programs, many of which will end next month. The savings rate for May was also very high, with Americans saving more than one-fifth of their disposable income. This suggests that consumer confidence is shaky, and that many households are anticipating future economic hardships, making them more reticent to open their wallets.