Consumers slashed their spending in December, as spikes in the coronavirus caused many Americans to stay home at the end of the holiday.
The decline provides some of the clearest evidence on how the spread of the Omicron . variant are affecting the economy. Forecasters expect tolls to get even worse in January, when a record surge in cases forced millions of people to stay home from work.
However, Omicron may not be the only factor driving December’s decline. Spending on services – the part of the economy hit hardest by the pandemic – actually increased last month , although slower than the fall. However, spending on goods has fallen. That could reflect supply chain problems, either directly – as consumers struggle to find the products they want – or indirectly, as holiday shoppers. change their spending arrive earlier in the fall to make sure their gifts arrive on time.
To date, there has been little evidence that Omicrons have caused more lasting damage to the economy. Personal income rose 0.3 percent in December, led by wage earnings and wages up 0.7 percent, indicating that employers continue to hire workers and offer unusual wage increases. Despite the latest Covid wave.
Overall, households should have plenty of money to spend once Omicron fades. The combination of rising incomes and falling spending pushed the personal savings rate to 7.9%. Americans as a whole have accumulated about $2.5 trillion in extra savings during the pandemic, the result of reduced spending and increased government aid.
However, not all families are so lucky. Savings of low-income households have gradually decreased in recent months, according to data from JPMorgan Chase Institute. And December is the last month that families receive a monthly payment through the Extended Child Tax Credit, Expires at the end of the year.
https://www.nytimes.com/2022/01/28/business/consumer-spending-december-omicron.html Consumer spending falls in December as Omicron . difference