U.S. household spending fell by 1.0% in February, the Commerce Department reported Friday, but is primed to pick up as stimulus checks arrive.
A spending surge is likely in the offing. Millions of people each day are getting a Covid-19 vaccine, and many are starting to venture out in public and shop and travel. Meanwhile, the federal government this month is sending out yet another round of stimulus money—this time checks of up to $1,400, a part of another Covid-19 relief package worth $1.9 trillion signed by President Biden. The aid—along with other measures by lenders and landlords to suspend consumers’ monthly payments on debt during the pandemic—has left many households sitting on a pile of cash.
That combo—higher incomes and a rising number of people shielded from the worse effects of the deadly virus—is expected to unleash a burst of economic activity in coming weeks, as many Americans resume activities they have put off for a year.