US private consumption plummeted in April due to the lockdown and a rapidly increasing number of unemployed. Consumers spent 13.6 percent less money on food, clothing, restaurant and hotel visits, or their health than the previous month, the U.S. Department of Commerce said. There has not been a major minus since the start of statistics in 1959.
The slump suggests that the world's largest economy could shrink as much in the current second quarter as it has since the Great Depression in the 1930s. Consumption accounts for more than two-thirds of the country's gross domestic product. Some economists expect GDP to fall by up to 40 percent.
Because of the coronavirus crisis and the drastic rise in unemployment, the Americans preferred to put money aside in April rather than spend it: the savings rate tripled to almost 33.0 percent after having been 12.7 percent in March. Income grew 10.5 percent faster than ever because millions of taxpayers each received $ 1,200 from the state crisis package.
The United States is the country most affected by the pandemic worldwide. In April, contact restrictions were enforced in many regions, and shops and restaurants had to close. In addition, many Americans lost their jobs: the number of unemployed has increased by more than 40 million in the past few weeks.