Spending by Americans with the lowest incomes has registered a far bigger bounce since the worst of the Covid-19 crisis than spending among the better off. That recovery may prove fleeting.
The drop in spending that started in mid-March, as worries about the novel coronavirus pandemic became widespread, was swift and devastating. An analysis conducted by nonpartisan research group Opportunity Insights of credit- and debit-card data collected by Affinity Solutions shows that by early April, spending by U.S. consumers had fallen 33% from January levels. Then starting in mid-April, when many Americans began receiving stimulus payments, things started picking up. As of June 17, spending was off by just 8.9%.
Stephen Roach, a Yale University senior fellow and former Morgan Stanley Asia chairman, tells MarketWatch that his forecast for a sharp deterioration of the U.S. dollar could be a very near-term phenomenon, not an event that looms off in the distance.
“I do think it’s something that happens sooner rather than later,” the economist told MarketWatch during a Monday-afternoon interview.
His comments come as the financial expert has been warning for weeks of an epic downturn of the buck that could signal the end of the hegemony of the greenback as a reserve currency — an event that would ripple through global financial markets.