Key Takeaway: Although it is still above early-June levels, consumer spending nationally has been in decline since June 26th, and now rests 8% below its January 2020 levels.
Despite a mostly positive July Jobs Report, there are a few concerning economic storm clouds on the horizon. In the weeks following the BLS’ July survey (conducted July 12 – 18), consumer spending gradually ticked upward until July 26th where it then began a steady decline through August 2nd (the most recent day for which we have consumer spending data available). While consumer spending has bounced around a lot over the past three months (just look at the big decline and sharp increase between the June and July BLS surveys), that this decline coincides with the final $600/week unemployment benefit payments suggests that this may be the start of a lengthier trend.
(Note: While the official end date for the federal $600/week benefit was July 31st, the final state payments including the $600 benefit were made on July 26th).
The chart below shows the states experiencing the steepest decline (greater than 3 percentage points) in consumer spending between July 26th and August 2nd. Like the national data, consumer spending for each state is reported as a percentage of its January 2020 levels.
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