Household income likely rose at a record pace in March as federal-stimulus checks helped fuel an economic revival that is poised to endure with an easing pandemic.
Economists expect household income—the amount Americans received from wages, investments and government programs—rose 20% in March from the previous month. That would mark the largest monthly increase for government records tracing back to 1959. The expected surge reflects $1,400 stimulus checks and other government aid included in a $1.9 trillion fiscal relief package signed into law in March.
Economists also project that income growth pushed up consumer spending by 4% last month, which would be the steepest month-over-month increase since last summer. Widespread vaccinations and the broader reopening of the economy will help the recovery endure after the effects of fiscal stimulus fade, economists say.
“If we have Covid-19 cases under control, that would ideally make way for us to reopen the services sector of the economy,” said Pooja Sriram, U.S. economist at Barclays. “That, in fact, is a crucial aspect of ensuring that this recovery continues.”
Stimulus payments included in the latest package propelled spending the most of all three rounds of pandemic stimulus checks, according to data-analytics company Earnest Research.
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