Disposable personal income in the U.S. increased by 12.9% in April, according to the latest report on personal income and outlays from the Bureau of Economic Analysis (BEA). At the same time, personal spending fell by 13.6% and Americans tripled their deposits into personal savings.
The spending drop was much steeper than the 6.9% revised decline in March, which in turn represented the sharpest spending fall since the BEA started tracking this data in 1959. By comparison, the steepest month-to-month personal spending decrease in the subprime mortgage meltdown was a 0.9% fall in September 2009.
In dollar terms, disposable personal income rose by $2.13 trillion in April while consumption decreased by $1.89 trillion. Savings jumped from $2.1 trillion to $4.0 trillion. Consumers funneled 33% of their disposable income into savings, up from 13% in March.
Coronavirus recovery relief
COVID-19 relief efforts made a significant difference to these figures. The Coronavirus Aid, Relief and Economic Security Act sent out $2.59 trillion of economic impact payments in April, which works out to roughly 14% of total disposable income. Unemployment assistance added up to $430 billion, up from $70 million in March and approximately $26 per month in the period leading up to layoffs and furloughs motivated by the COVID-19 crisis.