How Has the Pandemic Affected Spending?
The US has seen plenty of recessions. But a recession during which consumers are largely confined to their homes for weeks on end and, when they do venture out, are afraid to set foot in stores? That’s something new. And there’s a mix of commonality and difference in the ways various income groups have responded to this weird set of circumstances.
Opportunity Insights (a Harvard-based research project) said two-thirds of the total decline in credit card spending for January through May “had come from households in the top 25% of the income distribution.” Primed by stimulus payments, spending by low-income consumers had recovered (temporarily, anyway) from its March–April plunge and was 1.1% higher in late August than it had been in January. Spending by upper-income consumers also recovered some lost ground but was still 7.5% below its January level, while spending by middle-income households was down 1.9%.
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