The paycheck protection plan and increases in unemployment checks slowed or ended in July. We are just beginning to see the result. Consumer spending rose in July by 1.9% and incomes rose .4%. While neither of these numbers is a worry, one must be concerned with the slowdown in the growth of spending. The previous two months were well over 5% each, a very strong rebound from the severe collapse in spending in March and April caused by Covid-19.
An increase of 1.9% in the context of normalcy is high and would be celebrated pre-COVID as an outstanding number, but as it is, this signals a sharp slowdown of the economic recovery. We are still recovering but maybe at a much slower pace. The level of spending is about 5% lower than pre-COVID. We have a little more work to do.