U.S. household income climbed 10 percent in January from December, the U.S. Commerce Department reported, due in part to federal $600 stimulus checks the federal government sent that month to every adult and $300 in new weekly federal unemployment benefits.
The month-to-month gain was the largest since last April when the government sent everyone $1,200 and added $600 to weekly jobless payments.
As of last month, U.S. household income had risen 13 percent from February 2020, the month before the pandemic struck, and it is likely to rise again if Congress enacts President Biden’s $1.9-trillion stimulus proposal, which would give another $1,400 to every U.S. adult.
Americans spent 2.4 percent more in January than in December, especially on costly items such as appliances.
In 2020, consumer spending swelled in the summer, eased in the fall, and tanked in November and December as stimulus money was spent and states and cities reimposed lockdowns to curb the COVID virus’s return.
Household savings rose in January, reaching $3.9 trillion, almost triple the $1.4 trillion in savings accounts in February 2020.
“You’re going to see a pretty big consumer-led boom this year, which will spill over into next,” Joseph Brusuelas, chief economist at RSM US, said in comments quoted by the Wall Street Journal.
He expressed the view that the U.S. economy will balloon 6.5 percent this year, compared to 2020’s 3.5-percent contraction.
Consumers also increased spending on services in January, the first such rise since October. Orders for “durable” manufactured goods – those meant to last at least three years, such as trucks and refrigerators – rose 3.4 percent to $256.6 billion in January from December, the U.S. Commerce Department reported.
Excluding the more volatile category of transportation, which includes cars, trains, and other vehicles, the increase was 1.4 percent month-on-month, compared to a 1.7-percent rise in December.
TREND FORECAST: As we had forecast and this week’s Trends Journal cover illustrates, it will be the “Roaring 2021s” as people break loose and try their best to make up for the shelter-in-place lockdowns of the last year that sapped the joy out of lives. And with more stimulus checks coming and more to come in the future should the rebound falter, spending will continue to increase.
As we have forecast, however, when Wall Street crashes, so, too, will Main Street… sinking it, and much of the world, into the “Greatest Depression.”
