Coronavirus Prompts Record Drop in Consumer Spending

By 

Sarah Chaney and 

Harriet Torry

Updated April 30, 2020 1:27 pm ET
Income is declining, leading to a decline in spending. The month of March income has dropped 2%, leading consumer spending to drop 7.5%. This declined mainly in the second half of March due to the closing of many businesses from the government shutdown. On top of that, with the places that did remain open, customers do not want to go because of the stay-at-home orders. 
This has affected many industries, including the Health Care industry because consumers have cut back on their visits to the dentist, hospital and doctor. This was a major reason why the spending industry dropped. In addition, the restaurant industry has not been doing well, but the grocery stores have, making up for this offset. 
Since the businesses are not doing well, millions of Americans have lost their jobs. Because of this, they are all claiming unemployment, taking a toll. Since Americans are stuck at home, they are not going out and having many opportunities to go and spend money. This is not keeping the economy going because the only time people are leaving is to go to the grocery store or essential errands. 
Many Americans were not prepared for this economic crisis and did not prepare with their savings. This leads to many having to burn through the money they do have available. Once that money is gone, the government is trying to help to continue to keep the economy going. Interest rates are dropping, making it easier to get a loan. 
Hopefully this virus starts to clear so the economy can get flowing again and consumers are spending.