Anatomy of the Spending Plunge

US consumer spending posted its sharpest monthly decline in history in March, as expenditures slid 7.5 per cent. Personal income fell 2 per cent, its largest monthly pullback since 2013, according to the Commerce Department. The most precipitous declines occurred in travel: US travelers outside the US plummeted 69 per cent, and foreign travelers in the US slid 63 per cent. Entertainment was next: expenditures at movie theaters plunged 62 per cent and live entertainment, like music concerts, gapped down 58 per cent.

Most of the spending gains were concentrated in food purchases, which expanded a little more than 20 per cent last month. Equity market purchases grew by more than 50 per cent, as homebound investors turned their attention to day trading.

We expect April consumer spending to remain moribund, as most government-mandated lockdowns weren’t imposed until the middle of March. Stay tuned.

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Cresset is an independent, award-winning multi-family office and private investment firm with more than $60 billion in assets under management (as of 11/01/2024). Cresset serves the unique needs of entrepreneurs, CEO founders, wealth creators, executives, and partners, as well as high-net-worth and multi-generational families. Our goal is to deliver a new paradigm for wealth management, giving you time to pursue what matters to you most.

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From Chief Investment Officer, Jack Ablin.