The Precarious State Of Consumer Spending

The pandemic produced distinct winners and losers across consumer product categories as it upended the choreography of daily life. Overall consumer spending dipped 2-3% in 2020 after growing in 2019 and prior years. That decline, however, concealed windfall spending for goods consumed in and around the home, while travel-related categories were devastated. Government stimulus payments totaling more than $10,000 for many families left consumers flush with cash, boosting demand for goods that in many cases were supply chain constrained. Consumers shifted their expectations by paying more, waiting longer, and tolerating fewer choices as niche SKUs were deprioritized on production lines. How they purchased goods shifted, too, accelerating online.