The U.S. government is sending another round of checks meant to stimulate economic activity during the coronavirus pandemic. How will Americans spend their stimulus checks? In a collaboration with Maru/Blue Public Opinion, Refinitiv discovered how U.S. citizens plan to utilize this new round of funding.
Q3 2020 hedge fund letters, conferences and more
COVID-19 Stimulus Payments Inspire Saving Over Spending
- How do Americans plan to spend their stimulus checks?
- 44%, plan to save the money; 36% will pay off debts; 20% will spend the funds
Source: Maru/Blue Public Opinion Survey
- Increasing National Debt
- The deficit and national debt have risen significantly due to the federal stimulus programs
- End of 19Q4 the U.S. public debt-to-GDP ratio was 106.7% and increased to 127.3% at end of 20Q3
- The Cares Act (pandemic-related costs and relief measures) have brough the U.S. to its highest public debt levels in more than 70 years
- The deficit and national debt have risen significantly due to the federal stimulus programs
Source: Refinitiv Datastream
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- Although intended to fuel economic activity by consumers, a large portion of Americans are telling us they’ll be saving their stimulus checks followed by paying off debt
- 1 in 5 Americans intend to spend stimulus checks
- Refinitiv earnings forecasts suggests 21Q1 will be the first positive quarter in over a year as retailers will face easier YoY comparisons
- Household Durables, Internet & Catalog Retail and Leisure products may even receive a boost from stimulus check spending
- Although intended to fuel economic activity by consumers, a large portion of Americans are telling us they’ll be saving their stimulus checks followed by paying off debt
- Rising Personal Savings
- Personal savings rates are up:
- Beginning of 2020, personal savings rates were at 7.6%; April 2020, 33.7%; December 2020, 12.9%
- Experienced similar personal savings activity during the global Great Recession (December 2007 – June 2009)
- Personal savings rates are up:
- Spending the Stimulus Check
- Approximately 10 million Americans are unemployed and most likely to spend stimulus checks on basic living expenses, groceries, rent and mortgage
Source: Maru/Blue Public Opinion Survey
Sources: Data/Charts – “Refinitiv” and “Maru/Blue Public Opinion Survey” respectively
Commentary – “Jharonne Martis, Director of Consumer Research, Refinitiv”
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