As states began lifting stay-at-home orders and businesses reopened, consumer spending rebounded a record-setting 8.2% in May, according to the U.S. Commerce Department.

Data shows that durable goods, led by purchases of autos and recreation vehicles, had the sharpest increase at 29%. Spending on non-durable goods, like food and clothing, rose nearly 8%. The service-sector saw an increase of 5% led by healthcare spending, which had been curtailed before May due to hospitals focusing on the initial surge in COVID-19 patients. Mirroring the rise in consumer spending, U.S. retail sales soared a record-breaking 17.7% in May.

BREAKING: U.S. consumer spending jumped 8.2% in May in partial rebound from record drop, but economy is still seen as shrinking. https://t.co/VwkmfmsyYA

— The Associated Press (@AP) June 26, 2020

The increased spending comes despite a 4.2% drop in personal income, the Commerce Department reported. That’s way down from April, when personal incomes jumped 10.5%, thanks to $1,200 stimulus checks and other federal help. There have been more than 47.3 million applications for unemployment benefits filed since March.

Personal incomes are expected to drop even lower unless Congress approves more assistance, says Chris Rupkey, chief financial economist at Mitsubishi UFJ Financial Group. Millions of Americans will lose $600 a week in supplemental unemployment benefits when the federal program expires at the end of July. “Massive job losses with no paychecks will hit consumer spending hard in the months to come, and once the public’s pent-up demand purchases following the lockdown are made, economic growth could simply peter out,” Rupkey told The Washington Post.

Number of workers seeking unemployment benefits has held steady at about 1.5 million each week in June, signaling a slow recovery for the U.S. economy as states face new infections that could impede hiring and consumer spending.https://t.co/AodsFCFF5i

— Mia Farrow (@MiaFarrow) June 26, 2020

Consumer spending dropped 6.6% in March and tumbled 12.6% in April, data shows. The turnaround in May might give false hope as coronavirus infections have recently surged in several states, prompting pauses on reopening. Texas and Florida ordered bars to close and imposed new restrictions to mitigate a further rise in cases, CNN reported.

As far as the overall U.S. economy is concerned, the International Monetary Fund has issued a new forecast that predicts the economy will decline 8% in 2020 compared to 2019 as a result of the economic devastation caused by the coronavirus pandemic. The forecast is a downward revision from April, when the Washington, D.C.-based organization predicted that gross domestic product would retreat by 5.9%. The Federal Reserve has predicted that U.S. gross domestic product will decline by 6.5% in 2020 compared to 2019. A return to growth could occur in 2021, with the economy rising by 5% over 2020, the Fed forecast.