U.S. personal spending plunged 7.5 pct in March amid COVID-19 shutdowns

U.S. personal consumption expenditures (PCE) plunged 7.5 percent in March month-on-month amid widespread shutdowns triggered by the COVID-19 outbreak, the U.S. Commerce Department reported on Thursday. This marks the sharpest drop in government records since six decades ago, according to a report from Bloomberg.

Personal income decreased 2.0 percent in the month according to estimates released by the department's Bureau of Economic Analysis. Disposable personal income (DPI) also fell by 2.0 percent.

"The decline in March personal income and outlays was, in part, due to the response to the spread of COVID-19, as governments issued 'stay-at-home' orders," the bureau said.

"This led to rapid changes in demand, as businesses and schools switched to remote work or canceled operations, and consumers canceled, restricted, or redirected their spending," it continued.

PCE, which accounts for about two thirds of the U.S. economy, had seen moderate growth before the COVID-19 outbreak. PCE increased by 0.2 percent in February from the prior month.

The personal income and spending data came one day after the Commerce Department reported that U.S. real gross domestic product (GDP) in the first quarter contracted at an annual rate of 4.8 percent amid the COVID-19 impact, the biggest quarterly decline since the 2008 financial crisis.

According to data released Thursday by the U.S. Bureau of Labor Statistics, more than 30 million Americans have applied for jobless claims during the six-week period since mid-March.