Sharpest Drop On Record: Consumer Spending Plummets 7.5% In March

[turbinetree]

Source: Talking Points Memo

By MARTIN CRUTSINGER
|
April 30, 2020 9:34 a.m.

WASHINGTON (AP) — U.S. consumer spending plunged 7.5% in March, reflecting the growing impact of the coronavirus pandemic as Americans complied with stay-at-home orders.

The Commerce Department said that the spending decline was the sharpest monthly drop on records that go back to 1959, exceeding the previous record, a decline of 2.1% in January 1987.

Personal incomes also fell sharply last month, declining by 2% with wages and salaries, the largest part of incomes, falling by 3.1% as millions of Americans started getting lay-off notices.

The report said that the country experienced big declines as “consumers canceled, restricted or redirected their spending.”

Read more: https://talkingpointsmemo.com/news/consumer-spending-drop-coronavirus

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Wait until the April numbers come in.......

[McCamy Taylor]

1. Only 7.5%? I expected more.

I guess most expenses are fixed.

[dalton99a]

2. People will only spend on basic necessities

for many months to come - not knowing what the future will bring

[SWBTATTReg]

3. This is all? I expected more of a drop, but perhaps spending increased in areas related to ...

fighting the Covad 19 epidemic. I expected a somewhat bigger drop, mentioned in another DU post dealing w/ Economics, that savings will (for some) increase as a lot of spending went down, e.g., driving to/from work, parking at work, eating lunches while at work, etc. The key word above is 'redirected' their spending, for more meals prepared at home, for more anti-covad 19 types of supplies (cleaning, etc.), for more online access (mostly paid for by Businesses I suspect for their work from home employees).

I guess that this is good in a way, instead of getting a big drop as expected, we got less of a drop in spending than expected.

[LeftInTX]

6. Food is more expensive

Several factors: curbside, delivery etc.
Shortages and substitutions.
Social distance and masks while grocery shopping tend to result in grabbing the more expensive, brand name items.

[SWBTATTReg]

7. Yes, you are definitely right about food, etc. type of staples being more expensive if and when...

you can find it.

But in a lot of cases (IMHO), the retailers have given 'essential' retail workers better pay, time off if sick, etc. so the more money going out in the food arena is worth it, if supporting their workers (who ultimately are putting the food out for all of us (the tip of the spear so to speak)).

[IronLionZion]

4. Depends on what consumers are spending on

People will always be buying food and necessities. Online sales are always there for clothes and other items. My neighbor is always buying tons of clothes and returning much of it. I know this because she's always asking me to print the return labels for her.

I'm spending less and trying to avoid online shopping out of respect for the workers and people who depend on online deliveries. Much of what I want can wait. I just wear comfy casual clothes while WFH so I don't need much.

[LeftInTX]

5. With the exception of gas, we're spending more

We had the misfortune of having our microwave and fridge die, so we had to replace them.

We are spending more on food. I think most Americans are.

[Raftergirl]

8. Not surprising in the least.

Most people aren’t spending for anything other than groceries.

I could be online buying lots of things because our financial stipulation hasn’t changed on bit, but I’m not.

I’m not going anywhere that I need to buy new clothes for. We aren’t going out to expensive restaurants, that normally we’d go to twice a month (or sometimes more.) Not meeting friends for lunch, coffee. Not driving anywhere except to market and back. I last filled my car on March 7th for a 150ish mile drive back home from family function and my ‘gas guzzler” still has 1/2 tank left.

Husband is working from home so no spending at all from him. No dry cleaning of his dress shirts or suits or going out to lunch.

Not doing long weekends away which we spend a lot on. No manicures/pedicures or hair appts.

We normally save 2/3rds of H’s income every month and now it’s even more.

I am spending a reoccurring $120 a week through Feed The Frontline to have 10 meals, once a week, delivered to hospital workers at a NYC hospital.