Consumer spending in the U.S. rose 8.2 percent in May, more than doubling previous one-month spending increases dating back to 1959 when records began being kept.
Shoppers splurged on cars, appliances, and furniture as well as restocking staples.
Consumers took advantage of historically low interest rates to make big-ticket purchases, analysts report.
May spending, however, was 12 percent below February’s, the month before the shutdowns were mandated and tens of millions of workers lost their jobs.
While credit card spending rose in May, it fell back in June. Also in June, Americans saved about 20 percent of their earnings, an unusually high amount that indicates uncertainty about the future.
TREND FORECAST: Consumer spending will spike and fall over the coming months, with the long-term trajectory moving downward.
What will accelerate spending and a stronger economic rebound?
Wall Street is betting on a virus vaccine. “It’s only a partial recovery… I’m not sure that it can be sustained until there’s a vaccine” and “people feel safe,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
