(BofA) – US consumer spending soars as stimulus hits households: (BofA)
- U.S. spending on credit and debit cards increased in the first two weeks of January as Americans began receiving $ 900 billion in stimulus bill assistance.
- The relief program included $ 600 in direct payments, expanded unemployment insurance, and funding for education.
- Year-over-year spending increased the most among those earning less than $ 50,000 and stimulus recipients, according to data from the Bank of America.
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Spending on credit and debit cards accelerated in the first two weeks of January as the stimulus measures adopted by President Donald Trump strengthened household balance sheets.
Card spending climbed 6% from the prior year period in the week ending Jan. 16, Bank of America said in a note on Thursday, citing aggregate data on the cards. The rise follows a 9.7% year-over-year jump the week before.
Spending data is among the first to detail the impact of the $ 900 billion stimulus package adopted in late December. The program included direct payments of $ 600, expanded unemployment insurance, and funding for education. Eligible Americans began receiving payments within days of adoption, a marked improvement over the much slower rollout of the CARES Act.
This rapid distribution has a disproportionate impact on Americans hardest hit. Spending by stimulus check recipients increased 12.7% year-over-year last week, while those who did not receive checks spent only 2.8% more, according to the bank.
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Spending also increased the most among stimulus recipients earning less than $ 50,000. Recipients spent 22% more year over year last week, twice as much as non-recipients of the same income level. The spending gap between beneficiaries and non-beneficiaries narrowed among the highest incomes.
Americans eligible for the bill’s expanded unemployment benefits also spent more. Total card spending among UI recipients now exceeds non-recipients after being lower before the law was passed, Bank of America said.
As overall spending increased, the industries that suffered the most from the pandemic’s fallout received few benefits. Spending on airlines and entertainment showed little, if any, growth until early January. Home improvement, clothing and electronics have advanced over the past two weeks.
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