US personal spending plunged 7.5% in March amid shutdowns

Washington, May 1 (SocialNews.XYZ) US personal consumption expenditures (PCE) plunged 7.5 per cent in March month-on-month amid widespread shutdowns triggered by the COVID-19 pandemic, the country's Commerce Department reported.

This marked the sharpest drop in government records since six decades ago, Xinhua news agency quoted a Bloomberg report as saying on Thursday.

Personal income decreased 2.0 per cent in the month, according to estimates released on Thursday by the Department's Bureau of Economic Analysis.

Disposable personal income (DPI) also fell by 2.0 per cent.

"The decline in March personal income and outlays was, in part, due to the response to the spread of COVID-19, as governments issued 'stay-at-home' orders," the Bureau said.

"This led to rapid changes in demand, as businesses and schools switched to remote work or cancelled operations, and consumers cancelled, restricted, or redirected their spending," it continued.

PCE, which accounts for about two thirds of the US economy, had seen moderate growth before the pandemic.

It increased by 0.2 per cent in February from the prior month.

The personal income and spending data came one day after the Commerce Department reported that US real GD) in the first quarter contracted at an annual rate of 4.8 per cent amid the COVID-19 impact, the biggest quarterly decline since the 2008 financial crisis.

According to data released on Thursday by the Bureau of Labor Statistics, more than 30 million Americans have applied for jobless claims during the six-week period since mid-March.

The US currently accounts for the highest number of coronavirus cases, as well as deaths in the world.

As of Friday morning, the cases increased to 1,069,424, with 63,006 deaths, according to the Johns Hopkins University.

Source: IANS