How did consumer spending and personal income change after the sending of the Child Tax Credits?
Each month Bureau of Economic Analysis (BEA) releases data on personal income and consumer spending for the previous month.
In late August, the much anticipated figures for July were released. Many have been waiting to see these numbers as the government sent the first payment of the Child Tax Credit to millions of families.
The BEA reported that there was a slight increase seen in levels of consumer spending focused in the service industry. However, there were decreases in spending on good, which thankfully was offset by the increase seen in the service sector. Within the service industry spending was primarily focused in food services and accommodations.
The decreased spending on goods was seen “across both durable and nondurable goods, led by motor vehicles and parts (notably, new light trucks).”
In July, increases in personal income were seen, which the BEA believes were driven by “government social benefits and compensation of employees,” as more workers return to the workforce.
However, the gains were not as dramatic as some expected as many on unemployment saw their benefits cut, reducing household incomes.
Read more from the BEA here.