Americans snapped up clothing and shoes as they significantly spent more money for a second straight month in June. The Commerce Department said Friday personal spending jumped 5.6% last month as more businesses reopened. That follows May’s record increase of 8.5%.
Consumers also spent more on healthcare, restaurants, and lodging even as personal income fell 1.1%. Household spending is crucial for growth because it accounts for two-thirds of economic activity.
June’s increase puts spending on a higher growth trajectory heading into the third quarter. Still, expenditures remain below what they were before the pandemic hit. And the explosion of coronavirus infections could weigh on spending.
What’s more, tens of millions of unemployed Americans may soon find it harder to pay rent and buy food because they’ll lose their $600 in additional weekly jobless benefits Friday. The White House and Congress failed to reach an agreement to extend the supplement. There was no sign of a deal between the White House and Democrats as of early Friday morning.