Third Stimulus Check: Big $1,400 Stimulus Checks: Did Joe Biden Just Save the U.S. Economy?
Amid the disbursement of nearly one hundred sixty million coronavirus stimulus checks under the American Rescue Plan, it appears that recipients of the funds went on a shopping spree over the past month.
The Commerce Department reported on Thursday that retail sales surged 9.8 percent in March after dropping about 3 percent the month before, as sporting goods, clothing, and food and beverage led the sizeable gains in spending.
Sporting goods stores saw the largest jump in sales, up 23.5 percent in March from the month before, while clothing stores closely followed with 18.3 percent increase in transactions.
Moreover, the all-important bar and restaurant industry witnessed a 13.4 percent rise, thanks largely to relaxing of coronavirus restrictions due to more Americans getting vaccinated across the country.
Despite the positive numbers, it appears that other data are indicating that many Americans are tapping into the stimulus funds for basic everyday needs.
According to a new survey conducted by Fintech Zoom, it contended that a majority of the stimulus money continues to be spent on groceries, rent, mortgage, and other monthly bills. Paying off outstanding debt is also high on the list.
Furthermore, only 13 percent of Americans anticipate using their stimulus checks for discretionary purchases, such as eating at restaurants and taking a vacation.
“For all the talk of revenge spending and pent-up demand for travel, you wouldn’t know it by seeing just 13 percent of stimulus check recipients indicating that any of the money would be spent on discretionary activities or nonessential items,” Greg McBride, Fintech Zoom’s chief financial analyst, said in a statement.
“Stimulus continues to be a bit of a misnomer, with households predominantly using the money to pay monthly bills and provide day-to-day essentials. Even households with those bases covered are opting to pay down debt and boost savings—prudent decisions that lead to more sustained spending in the future,” he added.
According to research from the financial services firm TransUnion, four in ten Americans are still continuing to experience a loss of income compared to before the pandemic.
“38 percent of U.S. consumers said their household income remains negatively impacted due to the COVID-19 pandemic. … While 5 percent of the population has thrived during the pandemic—reporting no income drop and better than planned finances—another 3 percent are devastated by reduced income and don’t think they’ll ever recover,” the report wrote.
Another new poll conducted by the Federal Reserve Bank of New York revealed that U.S. consumers are putting away 42 cents of every dollar received from the third round of stimulus checks. Less than 25 percent of the money is being spent and the remainder is being used to settle outstanding debts.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.