According to a recent report from the U.S. Commerce Department, U.S. consumer spending slowed in August. This as core retail sales, which closely parallel the consumer spending component of the gross domestic product, dipped. The dip coincides with the expiration of the extended unemployment benefits that were cut for millions of Americans. Job growth also stalled in August, after rebounding in May and June as stores reopened after the COVID-19 shutdowns. All results offered additional evidence that the economic recovery from the COVID-19 pandemic recession was weakening. Gregory Daco, chief U.S. economist at Oxford Economics in New York said in a summarization of the situation, “Consumers are being increasingly cautious with their spending. If Congress is unable to extend fiscal aid to households in the coming weeks, the economy will be particularly susceptible to a cutback in consumer spending, especially from the lowest-income families.”
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Fading fiscal stimulus restraining U.S. consumer spending