US households cut spending by 1% last month, with cold weather hitting much of the country, but they are ready to resume shopping with the reduction of the pandemic and a new round of stimulus money landing in bank accounts.
The decline came after an explosion of stimulus-induced spending in January, when spending grew 3.4%, stronger than previously estimated. Household income fell 7.1% last month, the Commerce Department said, after government stimulus money caused income to rise 10.1% in January.
Consumers cut spending on goods dramatically last month, while spending on services increased.
The overall decline in revenue and spending last month is expected to be temporary.
Cold weather – including storms that closed sections of Texas and other states – prevented many people from dining out, ordering food online or going to stores last month. Household income also fell from unusually high levels in January, when the government distributed stimulus checks of up to $ 600 per person to most households, according to a $ 900 billion economic aid plan approved by Congress last year. past. This law also provided enhanced employment benefits of $ 300 a week for unemployed workers.