washington american consumers increased their spending by a record 82 in may partly erasing huge plunges the previous two months against the backdrop of an economy thats likely shrinking by its steepest pace on record this quarter last months rebound in consumer spending followed record spending drops of 66 in march and 126 in april when the viral pandemic shuttered businesses forced millions of layoffs and sent the economy into a recession since then many businesses have reopened drawing consumers back into shops and restaurants and restoring some lost jobs fridays commerce department report showed that americans stepped up their spending in may despite a 42 decline in personal income which had soared by 108 the previous month income had jumped in april on the strength of billions of dollars in support through government payments in the form of unemployment aid as well as onetime 1200 stimulus checks in may those stimulus checks were no longer counted as income for most people advt besides the unemployment aid states are providing to the 30 million jobless americans the federal government is providing 600 a week in additional benefits the federal money has pumped nearly 20 billion a week into the economy and enabled many of the unemployed to stay afloat but the 600 a week in aid will expire after july and trump administration officials have said they oppose an extension without the stimulus checks or an extension of unemployment aid its unclear whether consumers will keep spending freely in testimony to congress last week federal reserve jerome powell said he thought lawmakers should consider providing some form of extended unemployment benefits beyond their typical sixmonth period on the assumption that joblessness will likely still be quite high by years end last months rise in consumer spending also coincides with a sudden surge in coronavirus cases thats forcing states and businesses to consider scaling back or even reversing the reopenings if an escalation of the pandemic does force another round of widespread business shutdowns fewer people would shop travel eat out or attend large events that would reverse any rebound in spending and would further weaken the economy consumer spending is closely watched because it accounts for about 70 of economic activity despite the increased spending in may economists have estimated that the economy as measured by the gross domestic product is contracting at a roughly 30 annual rate in the apriljune quarter after shrinking at a 5 rate in the januarymarch period that would be by far the worst us quarterly contraction since recordkeeping began in 1948 advt economists cautioned against reading much into last months surge in consumer spending they noted that the increase followed two record declines and that it still left spending 11 below its pace before the pandemic hit amid rapidly rising infections across many states risks to the outlook are dangerously tilted to the downside gregory daco chief us economist at oxford economics said in a research note fridays report showed that among the categories