When Jonathan White, an audio engineer at a performing arts center in Dallas, was furloughed in June, he benefited from the additional unemployment money in the federal stimulus package.
“I got six weeks of the $600 stimulus, which was great,” he said. “I was making about as much as I would in a 40-hour week.”
And he was spending — mostly on accessories for his home office. He does some freelance work.
“I was at Best Buy probably once a week picking up something stupid here or there,” White said.
But at the end of July, the money ran out. White started spending a lot less. And he said if there’s no more stimulus from Congress, he’s going to cut back on his holiday spending this fall, too.
“I’m going to be reducing how much I spend on gifts,” he said. “I’m looking at visiting my mom in North New Jersey, seeing some friends in New York. You know, those prospects are slimmer now.”
It’s hard to say exactly why that is. It was back-to-school season, and kids grow out of their clothes quickly — pandemic or not. Also, auto sales are going up as people stop riding public transit and move to the suburbs.
People might also be doing some holiday shopping early, said Sonia Lapinsky, a managing director at Alix Partners.
“We’re seeing a bit of a spike,” she said. Regardless, “there’s no additional dollars in their wallets to maintain this spike.”
The first stimulus package propped up the economy. It gave people money to spend and allowed them to save more. But those savings have quickly been running out, according to a study out Friday from the University of Chicago and the JPMorgan Chase Institute.
“At this point, it doesn’t look like we’re going to see any kind of stimulus be deployed until after the election or possibly not until the first quarter of next year,” said Erik Lundh, a senior economist at the Conference Board.
“Until we get another package that comes in and offers some relief, I think we’re risking a double-dip recession,” he said.
And that would continue the downward spiral of less spending and more layoffs.
COVID-19 Economy FAQs
New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?
Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
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