Photo: RetailWire
Retailers, including Home Depot, Lowe’s and Target, have pointed to a temporary boost in April sales as Americans cashed the COVID-19 stimulus checks they received as part of the federal government’s effort to boost consumer spending. The reality, according to new research, and those who think the program failed to deliver the stimulus needed, was that much of the money received went straight to paying mortgages, rent and other bills.
Thirty percent of respondents to a YouGov survey said they paid bills after receiving their checks from the Internal Revenue Service. Fourteen percent put the money into emergency savings, 10 percent bought essential items, such as food, and eight percent used it to help pay down debt. Many others were part of a group of 19 percent who either did not receive a check or did nothing with the one they did receive.
“It’s alarming to look at how many Americans used these funds to keep a roof over their head and pay for necessities considering the federal government has not provided clarity about another round of stimulus payments being provided in the near future,” stated the YouGov report as per MarketWatch.
The YouGov research is not the only evidence that staying afloat, vs. engaging in discretionary spending, is the focus of a large percentage of people.
A separate MarketWatch article highlights research conducted by economists from leading universities, including Columbia, Northwestern and the University of Chicago.
“Given the size of the 2020 stimulus checks, we might have expected large impacts on categories like automobile spending, electronics, appliances, and home furnishings,” the economists wrote. “Instead, it seems that individuals are catching up with rent and bill payments as well as engaging in spending on food, personal care, and nondurables.”
Many argue that the federal government needs to provide further stimulus payments to help not only keep the 40.7 million-plus Americans financially afloat who have filed for unemployment benefits since the coronavirus outbreak, but to jump-start consumer spending, which accounts for roughly 70 percent of the nation’s gross domestic product.
Mark Cuban, the billionaire entrepreneur, tweeted last week that the effort to boost businesses up with loans and grants, popularly known as PPP, has failed to deliver what the economy needs.
“The only thing that will save businesses is consumer demand. No amount of loans to businesses will save them or jobs if their customers aren't buying,” Mr. Cuban wrote on May 17.
The owner of the NBA’s Dallas Mavericks and one of the stars of ABC’s “Shark Tank” tweeted, “It’s time for trickle up economics” as he advocated for a federal jobs program that would include training Americans to take part in a national effort to track, trace and test for COVID-19.
He also recommended that every household in America receive a check for $1,000 every two weeks with a stipulation that it be spent within 10 days or the funds would expire. Such a program would cost taxpayers about $500 billion as it helped stimulate demand for non-essential services and products, “hopefully helping to keep most businesses alive” long enough for the public health issues to be addressed and economic growth to return to a semblance of normality.
- If you received $1,200 from the federal government as a stimulus payment, what did you do with the majority of the funds? – YouGov
- The No. 1 thing Americans are spending their stimulus checks on — even more than shopping at Costco, Walmart and Target – MarketWatch
- This is how fast Americans are spending their stimulus checks — and here’s a breakdown of what they’re buying – MarketWatch
- Mark Cuban – Twitter
- Lowe’s and Home Depot get a boost as customers stay-at-home – RetailWire