U.S. Household Income Surged by Record 21.1% in March

Higher income, spending and saving are expected to help power a growing economy.

Household income surged by a record 21.1% in March, as stimulus checks hit bank accounts and propelled consumer spending.

The surge reflects $1,400 stimulus checks and other government aid included in a $1.9 trillion fiscal relief package signed into law in March.

Widespread vaccinations and the broader reopening of the economy will help the recovery endure after the effects of fiscal stimulus fade, economists say.

“If we have Covid-19 cases under control, that would ideally make way for us to reopen the services sector of the economy,” said Pooja Sriram, U.S. economist at Barclays. “That, in fact, is a crucial aspect of ensuring that this recovery continues.”

Stimulus payments included in the latest package propelled spending the most of all three rounds of pandemic stimulus checks, according to data-analytics company Earnest Research.