BlackRock Investment Institute

Macro insights

Consumption check

Overall consumer spending is likely to return to its pre-Covid trend as pent-up demand is unleashed, in our view. Yet its composition will likely look different as Covid inspired shifts in consumer behavior take hold. We see three reasons why the restart in the consumer sector may be different from a typical business cycle recovery.

Stimulus payments are already boosting consumption – especially for low-income groups

Sources: BlackRock Investment Institute, with data from  Opportunity Insights, February 2021. Notes: The chart shows U.S. consumer spending by income group, compared to the levels in January 2020.

Spending will likely recover much more quickly as vaccine-led easing of restrictions paves the way for the level of activity to normalize.

Consumer balance sheets have been healthy thanks to unprecedented policy support - avoiding the kind of deleveraging shock seen in the global financial crisis that depressed spending. 

Third, the shock has turbocharged transformations already underway in spending – such as a shift to e-commerce, a trend we see staying in place even as restrictions ease.

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