Consumers are feeling better. That’s essentially the takeaway from a number of consumer sentiment surveys we follow pretty closely here at Marketplace — given that about two-thirds of the economy is consumer spending and also that whether and how soon consumers return to pre-pandemic spending behavior will be crucial to getting the economy fully recovered from the pandemic.
The University of Michigan’s consumer survey shot up in March — more than 8% — to the highest level in a year, though it’s still about 7% below pre-pandemic levels.
The $1.9 trillion government rescue package, with $1,400 payments for all but high-earning Americans, plus another $1,400 for each kid, is helping to cheer folks up a good deal.
It’s been a week and a half since President Joe Biden signed the relief bill, also known as the American Rescue Plan. Payments started going out within days, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.”
Leer said this time around the checks are bigger and they’re getting out faster.
Plus, the money’s targeted to low- and middle-income households, which are most likely to have lost work and be strapped for cash.
Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.
“What we’re seeing now is this really cautious optimism, where people say, ‘We can see signs that things are going to be getting better, but, uhh, we’re not quite ready to jump in headfirst,’” she said.
The latest survey by Forbes Advisor-Ipsos finds roughly half of Americans don’t believe it’s a good idea to reopen businesses 100% before the coronavirus is fully contained. And Morning Consult’s consumer surveys find that well over half of Americans still don’t feel comfortable traveling or going to a restaurant, shopping mall or sporting event.
Leer said more vaccination and continued coronavirus vigilance are crucial. “We’re sort of at this critical junction right now where we need to keep cases down for the next three months, let’s say, so that we’re able to unleash the full extent of our pent-up demand later in the summer.”
The money’s there, Leer said, from the latest relief checks and surging savings. Folks just aren’t feeling quite confident enough to spend it up — yet.
COVID-19 Economy FAQs
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
Give me a snapshot of the labor market in the U.S.
U.S. job openings in February increased more than expected, according to the Labor Department. Also, the economy added over 900,000 jobs in March. For all of the good jobs news recently, there are still nearly 10 million people who are out of work, and more than 4 million of them have been unemployed for six months or longer. “So we still have a very long way to go until we get a full recovery,” said Elise Gould with the Economic Policy Institute. She said the industries that have the furthest to go are the ones you’d expect: “leisure and hospitality, accommodations, food services, restaurants” and the public sector, especially in education.
What do I need to know about tax season this year?
Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.
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