Consumers Boosted Spending by Just 0.5% in April
[Stay on top of transportation news: Get TTNews in your inbox.]
WASHINGTON — Americans increased their spending by a slight 0.5% in April, a slowdown after a massive gain in March that had been powered by the distribution of billions of dollars in individual stimulus checks.
Even with the pullback from a 4.7% surge in spending in March, the April increase provided further evidence that consumers are driving a strengthening recovery from the pandemic recession.
The May 28 report from the Commerce Department also showed that personal incomes, which provide the fuel for spending, tumbled 13.1% in April. But the drop in income was expected, having followed a record 20.9% income gain in March that reflected the billions in one-time checks to most adults.
The April gain in spending supported the view that the economy is rebounding rapidly as individuals and businesses grow increasingly confident enough to spend, hire and invest. On May 27, the government estimated that the economy grew at a robust 6.4% rate in the January-March quarter, powered in large part by consumer and business spending.
The economy is thought to be expanding even faster in the current April-June quarter. The outlook for the rest of the year is brightening, too, on the strength of trillions of dollars more in government support, increased mobility as vaccinations keep increasing and a surge in pent-up consumer demand. More Americans are venturing out to shop, travel, dine out and gather in large groups at sporting and entertainment venues. For 2021 as a whole, many economists foresee growth, as measured by the gross domestic product, achieving its fastest pace since at least 1984.
Want more news? Listen to today's daily briefing below or go here for more info:
