Personal income in the US surged 10.5% in April, the biggest jump since the US Bureau of Economic Analysis starting compiling data in 1959.
The rise was mainly due to government payments to help Americans cope with the fallout of the Covid-19 global pandemic. Federal economic recovery programs, including personal stimulus checks, amounted to nearly $6.2 trillion. Unemployment insurance payments, meanwhile, rose by more than 500% to $430 billion in April.
As a result, government social benefits accounted for 30%, or $6.3 billion, of personal income in April. That’s up from a monthly average of 17%—or $3.2 billion—in the previous seven months.
Even with this additional cash influx, Americans are spending less due to coronavirus-related restrictions. Personal spending declined by nearly $1.9 trillion, or 14%, in April from the previous month. The industries that were hurt most by the drop were health care, food services, hotels, as well as bars and restaurants.