U.S. consumer spending plunged by a record-shattering 13.6% in April as the viral pandemic shuttered businesses, forced millions of layoffs and sent the economy into a deep recession.
WASHINGTON (AP) — U. S. consumer spending plunged by a record-shattering 13.6% in April as the viral pandemic shuttered businesses, forced millions of layoffs and sent the economy into a deep recession.
Last month’s spending decline was far worse than the revised 6.9% drop in March, which itself had set a record for the steepest one-month fall in records dating to 1959. Friday’s Commerce Department figures reinforced evidence that the economy is gripped by the worst downturn in decades, with consumers unable or too anxious to spend much.
Even with employers cutting millions of jobs during the month, personal incomes soared 10.5% in April, reflecting billions of dollars in support through government payments in the form of unemployment benefits and stimulus checks.
The depth of the spending drop is particularly damaging because consumer spending is the primary driver of the economy, accounting for about 70% of economic activity. Last month’s figure signaled that the April-June quarter will be especially grim, with the economy thought to be shrinking at an annual rate near 40%.
