by Wolf Richter
Household Income Drops from Historic Spike, Spending Bounces off Historic Plunge But Remains Low. Income from wages and salaries remains crushed.
The $2,400 in stimulus that a couple received in April made a great down-payment for a car in May. If it was used as a down-payment, the loan itself multiplied the consumer-spending effect. Instead of spending $2,400 on other stuff, the couple might have spent $24,000 on the car, with rest of the money being borrowed. But it’s the $24,000 that counts as consumer spending in May, and the $2,400 that counted as income in April.