COVID-19 Stimulus Payments Boost Savings Rather Than Spending

The U.S. government is sending out another round of checks meant to stimulate economic activity during the coronavirus pandemic. Eighty percent of U.S. recipients plan to: save the money (48%), or pay off their debts (32%), Refinitiv discovered in a collaboration with Maru Public Opinion (Exhibit 1). About one in five (20%) of Americans will either spend it (15%), while the remaining 5% will invest the funds.

Exhibit 1: How Americans Plan to Use Their Stimulus Check

Source: Maru Public Opinion


Rising personal savings

Nearly half of Americans (48%) receiving a check in the latest round of stimulus plan to save the money. Personal savings rates are up, according to the U.S. Bureau of Economic Analysis.

This economic indicator was 7.6% at the beginning of 2020, then skyrocketed to new highs at 33.7% in April 2020 during the pandemic.

The savings rate dropped as consumers gradually increased spending during the summer of 2020 and into Amazon Prime Day. However, when another round of stimulus checks were sent out in January, the personal savings rate spiked again to 20.5%. This suggests that Americans are still concerned about the pandemic and perhaps building up their emergency funds.

Traditionally, the personal savings rate rises during economic downturns. This was also seen during the global Great Recession (December 2007 – June 2009), when several financial institutions fell and consumers were worried about job security.

Exhibit 2: U.S. Personal Savings Rate

(Click on image to enlarge)

Source: Refinitiv Datastream

Spending the stimulus check

The survey also shows that those who plan to spend their stimulus money intend to use it mainly for groceries, and put funds toward basic living expenses, including electricity bills (Exhibit 3). Refinitiv discovered this in a collaboration with Maru Public Opinion, a panel and data service insight firm. The findings and detailed tables can be found here:

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