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
So what’s up with “Zoom fatigue”?
It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.
How are Americans spending their money these days?
Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?