US households cut spending by 1% last month as cold weather hit much of the country, but are poised to pick up shopping again with the pandemic easing and a new round of stimulus which lands money in bank accounts.
The drop came after a stimulus-induced spending explosion in January, when spending grew 3.4%, stronger than previously estimated. Household incomes fell 7.1% last month, the Commerce Department said, after government stimulus money caused incomes to rise 10.1% in January.
Consumers drastically reduced spending on goods last month, while spending on services increased.
The overall drop in revenue and spending last month is likely to be temporary.
The cold weather, including storms that closed sections of Texas and other states, prevented many people from eating dinner, ordering food online or going to stores last month. Household incomes also fell from abnormally high levels in January, when the government distributed stimulus controls of up to $ 600 per person to most households under a $ 900 billion economic relief plan. of dollars approved by Congress late last year. This law also provided for improved labor benefits of $ 300 per week for unemployed workers.