Given the headline data from yesterday’s GDP print, this should not be a total surprise but Americans’ spending crashed in March.
After adjusting for inflation, spending slumped 7.3%, also the most ever and underscoring data out Wednesday that showed the sharpest drop in consumer spending since 1980 during the first quarter.
The report also showed nominal incomes dropped the most since January 2013. reflecting a 3.1% decrease in wages and salaries as a result of the pandemic.
This sparked the biggest annual contraction in US spending ever – larger than at the peak of the Lehman crisis
If there is any silver lining, Americans are “living within their means” like never before as the savings rate explodes from 8.0% to 13.1% of disposable income… the highest since 1975
The numbers are the latest tally of how the shutdown was bearing down on a U.S. economy that’s all but officially in a recession… which can only means more gains for stocks, right?
Think of all that “pent-up” spending demand!!