Consumer Spending Jumps for a Second Month ... But


Consumer spending rose in May and June but is well below pre-Covid levels.

The BEA's Personal Income and Outlays report shows Personal Consumption Expenditures rose 5.6% in June and Real PCE rose 5.2%  

Key Points

  • Real PCE rose by $623.0 billion increase in June. This reflects an increase of $273.7 billion in spending for goods and a $362.1 billion increase in spending for services.
  • Within goods, the leading contributor to the increase was spending for clothing & footwear. 
  • Within services, the leading contributors to the increase were spending for health care as well as food services and accommodations. 
  • Personal saving was $3.37 trillion in June and the personal saving rate—personal saving as a percentage of disposable personal income—was 19.0 percent.
  • The PCE deflator (measure of inflation) for June was 0.4%. Excluding food and energy the PCE deflator was 0.2%.
  • The PCE deflator rose for 0.8% from June 2019. Excluding food and energy the PCE deflator rose 0.9% from a year ago.

PCE and Real PCE June 2020

PCE and Real PCE June 2020

PCE and Real PCE 2007-Present

PCE and Real PCE 2007-Present June

PCE and Real PCE vs February 2020 and June 2019

  • February PCE: 14,877.4 Billion
  • February Real PCE: 13,402.4 Billion
  • June PCE: 13,851.2 Billion
  • June Real PCE: 12,517.5 Billion
  • PCE Percent Change From February: -6.89%
  • Real PCE Percent Change From February: -6.60%
  • PCE Percent Change From June 2019: -4.83%
  • Real PCE Percent Change From June 2019: -5.54%

Trouble Brewing

Consumers can spend but income is about to dry up.

Over 30 Million People About to Lose Unemployment Benefits

As noted on Sunday the Clock Just Ran Out on $600 in Weekly Unemployment Benefits.

Roughly 30 million people are receiving some form of pandemic aid.

Cutback Details

  • The GOP proposes to cut the enhanced unemployment benefit from $600 to $200 per week through September. That is in addition to what recipients get from states unemployment insurance.
  • The GOP also proposes to set the maximum assistance at 70% of a worker’s previous wages, with a cap of $500 per week.

Those with no pay or little pay will be hammered this week.

"So Far Apart on Covid Deal That We Don't Really Care"

These are huge numbers, especially those who received no pay at all.

Nonetheless, Trump says "We are So Far Apart on a Covid Deal That We Don't Really Care"

Philosophically Speaking

Philosophically, people should not make more being unemployed than employed.

Politically speaking, the Republicans just stepped on a landmine.

"We Don't Really Care" - That Says it All.

Over 62 Million People Had No Pay Last Week

Yesterday, I commented Over 62 Million People Had No Pay Last Week

Those are not-retired people who reported having no pay last week.

87.333 million people expect an income loss in the next four weeks. Income loss is by household, not individually.

Data is from Household Pulse Surveys by the Census Bureau.

Click on the above link for five related charts.


Comments (73)
No. 1-12

Meanwhile, the federal government staggers toward shutdown on September 30th wit no budget in place.

WTF is wrong with these people ?


It is all part of Trump’s master plan to bring America to its knees.


I assume this was all part of “re-opening” everything which led to massive outbreaks so where do we go from here? More shutdowns or more hospitalizations?

Also, we have flu season+corona virus+malnurished people in our near future to ponder.

Tony Bennett
Tony Bennett

Never mind a lot of spending fiscal stimulus related (and waning) ... some consumers about to be hit by 2 x 4 when they come off forbearance / moratorium.

Landlords / Lenders for the most part want missing payments back quickly.

Another fly in the ointment re forbearance. As mortgage rates tank to all time lows, those who took forbearance option can not refinance until they pay back all of forbearance ... or have made 3 - on time - payments with restart.


The white house offered continuing the $600/week for 4 months. Rejected by democrats. I guess they want it to last forever.


Nothing to worry about here, now that the central bank is controlled by politicians. In this election year, Fed money printer go brrrrrrr. Get out of cash and into tangibles. TINA, you know.


No consumption issues when people can splurge on iPhones and crap.

Consumers are flush. Recession is a hoax.


The senate just said screw it for the next few days. The latest is Pelosi and Trump are trying to negotiate the next stimulus bill and leave the republicans out of it which from what i'm reading is legal.


Look guys. We know the coronavirus is not a hoax because of hospitalizations and deaths.

The recession however is a hoax because consumers can afford to throw money on unnecessary stuff like entertainment. Chip sales are up big. Ad sales are strong. Where is this recession? Businesses like restaurants and airlines are struggling no doubt, and some people working for those industries should be helped with means testing, but everybody else should not be getting free money especially if they don't keep up with obligations such as paying rent.

I would suggest the government pays rent directly to landlords. There should NOT be any cash giveaway. Every expense has to be justified. Netflix OUT. Amazon Prime OUT. Extra cell phone plan, OUT. Video Games, OUT.


consumer spending is up. no but's, please.


We have stagflation thanks to the stimulus from PPP, UI and bailouts in general.

Global Economics