Spending at stores essentially stalled in late March and April, as restrictions imposed to confront the spread of COVID-19 took its toll on the retail sector. The inability of consumers to spend freely also took a toll on the U.S. economy, since consumer expenditures make up over 70% of GDP. So when consumers were halted from spending, GDP fell an unprecedented amount of over 31% in the 2nd quarter.
The gradual reopening of stores in the 3rd quarter and increased online shopping options gave consumers the chance to regain their spending habits. Unfortunately, many of the same consumers that were spending freely before the pandemic had since lost their job or suffered a blow to their income. Millions of consumers have since resorted to tapping unused credit cards and lines of credit in order to meet ongoing living expenses.
Source: Federal Reserve Bank of St. Louis
PlanRock offers financial planning tools, investment portfolios, various levels of advice, and full-service support. Please contact 800-677-6025 or go to www.PlanRock.com for more information about how we can help you reach your goals.
© PlanRock Wealth Management, LLC. The content above is available for use only by authorized subscribers, clients and where permissible as such. This content is not authorized for resale. Past performance does not guarantee future results. The sources we use are believed to be reliable, but their accuracy is not guaranteed.