Incomes surge, spending plummets and the saving rate hits a record breaking 33% in April. Income from all of the stimulus checks, tax saving and UI support - much of which were not received until later - were counted for accounting purposes in April. Prices decelerated.

The accounting of data is important as the timing does not always match what we are seeing in a real time basis. Many households actually drained their saving and waited hours in miles long food lines to feed their families in April. March data for income were revised down.

March data for spending was revised up slightly but still horrific. The saving rate gives a false sense of ability to spend as it is a residual of the way incomes were accounted for. Spending was revised up for March slightly but the collapse in April was stunning.

Huge blow to health care services as dental and small physicians offices were closed and people delayed health care visits for fear of contagion. Having been in hospital recently, I can say the fear is palatable.

There is some pent up demand to be tapped as delayed stimulus checks and UI payments made it into bank accounts in the last weeks of May. This will not eliminate the drag on the economy from what is now looking to be more long term furlough and layoffs.

The PCE index - the Fed’s preferred inflation measure - decelerated to an 0.5% increase, it weakest pace since the oil price collapse of late 2015. The core PCE (ex food and energy) slowed to a 1%, its lowest pace Dec 2010. Drops a monthly basis broad based, expect for food.

Sadly, food was the primary expense for households during the month - this is exacerbating inequality and the despair low wage families, in particular, are suffering.