U.S. personal income, consumer spending drop in February
Personal income decreased 7.1 percent in February, according to estimates released by the department's Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased 1.0 percent.
"In the absence of stimulus payments which boosted income in January, personal income dropped 7.1 percent in February. Without the extra funds and amid severe winter weather, household spending dipped 1.0 percent," Tim Quinlan and Shannon Seery, economists at Wells Fargo Securities, wrote Wednesday in an analysis.
The Bureau of Economic Analysis, meanwhile, noted that economic impact payments associated with the 900-billion-dollar relief package approved in December "declined sharply" in February and unemployment benefits continued, "but at a lower level."
"Additionally, restrictions and closures continued in some areas of the United States," the bureau continued.
While there are signs of recovery, the country is still down nearly 10 million jobs from its pre-pandemic peak, U.S. Treasury Secretary Janet Yellen noted at a congressional hearing earlier this week.
"We are meeting at a hopeful moment for the economy - but still a daunting one," Yellen said.
With the passage of the 1.9-trillion-dollar relief package, the treasury secretary said she is confident that the country may see "a return to full employment" next year.
"Households are still saving and more money is on the way, which should result in record spending later this year as the services economy re-opens," Quinlan and Seery said. ■