The historic consumer price drop in April may be more than a temporary setback.
Michael Gapen, Barclays' head of US economics research, warns widespread job losses due to the coronavirus pandemic is radically changing Americans' spending habits.
He suggests the damage will last years.
"Whether this is a permanent shift will in part depend on just how different the world looks when we emerge from economic lockdowns and whether or not we're ultimately able to get a vaccine," he told CNBC's "Trading Nation" on Tuesday.
The Consumer Price Index excluding food and energy, also known as CPI, saw it steepest monthly drop on record last month, according to the Bureau of Labor Statistics. The pullback was sparked by a demand collapse in connection with the virus fallout.
"Consumers have cut back on a wide variety of non-essential spending," he noted. "They're really funneling all their purchases into necessary consumer staples."
According to Gapen, normal spending patterns won't emerge until the jobs market materially improves and the virus threat disappears.
"It could take three years at a minimum to kind of pull all of this unemployment back," he added.
In April, the unemployment rate surged to 14.7% in April. It sat at 3.6% in January.
If there's no vaccine this year, Gapen's best case scenario is an unemployment rate that falls to 10.5% by December. It's a level that would still be too high to get consumers to loosen their purse strings again.
"Households will remain cautious," Gapen said.