Mar 26, 2021 - Economy

Consumer spending fell by 1% in February

Illustration of person holding a smartphone with a downward trending line graph

Illustration: Eniola Odetunde/Axios

Consumer spending fell by 1% in February as Americans were faced with extreme cold weather, the Department of Commerce said on Friday.

Why it matters: Consumer spending is a closely watched economic metric for businesses struggling to recover from weak sales due to the pandemic. Lockdowns, consumer fear over safety, and unemployment have all contributed to the weakness.

Details: The drop comes after consumer spending grew 2.4% in January following "a burst of stimulus-induced spending," according to the Wall Street Journal.

  • Household income dropped by 7.1%.
  • Economists expected consumer spending to decrease by 0.7% in February, according to Reuters.

What to watch: Consumer spending is expected to bounce back as new stimulus checks continue to be distributed to Americans.

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