U.S. consumer spending increased for a second straight month in June, setting up consumption for a rebound in the third quarter, though the recovery could be limited by a resurgence in COVID-19 cases and the end of expanded unemployment benefits.

Concerns about sky-rocketing coronavirus infections and the expiring jobless benefits hurt consumer sentiment in July, other data showed Friday. Robust consumer spending is critical to reviving the economy after it suffered its biggest blow since the Great Depression in the second quarter.

“The June data confirm the strong initial phase of the recovery, but we caution that rear-view mirror economics could drive us off a cliff,” said Gregory Daco, chief U.S. economist at Oxford Economics in New York. “Low-income families have nearly regained pre-COVID spending levels supported by strong fiscal aid, but with numerous assistance programs expiring, and a mismanaged health crisis constraining spending on services, the second phase of the recovery will likely be much slower.”

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 5.6 percent last month after a record 8.5 percent jump in May as more businesses reopened, the Commerce Department said.

The U.S. suffered its biggest economic decline in the second quarter of 2020 since the government began recording the index after World War II.

Its GDP plunged 32.9 percent, official data showed, following a 5-percent decline in the first quarter. It is far worse than the 8.4-percent quarterly drop during the 2007-2009 Great Recession. Before the COVID-19 pandemic, the largest drop in GDP on record was 10 percent in 1958. (SD-Agencies)