Retail spending spiked in March when checks for $ 1,400 got here in, however do not fall for tales of revenge spending

According to a recent survey by the New York Federal Reserve, people expected to use 24.7% of their relief exams on the US consumer spending bailout plan, with 13% going on essential goods and only 8% on non-essential expenses. In contrast, people expected to use 33.7% of the money to pay off debt and planned to save 41.6%. Heads of household without a college degree or with lower incomes are likely to spend more paying off debts than heads of households with college degrees or higher incomes.

With all the talk of revenge spending and pent-up demand for travel, you wouldn’t know if only 13 percent of stimulus check recipients say some of their money is being spent on discretionary activities or non-essential items, “Greg McBride said Bankrate’s chief financial analyst told NBC News, It means stories like this CNBC gem opening in the Gucci store in New Jersey’s Mall in Short Hills: “Among the buyers waiting to enter are Gucci’s typical clientele as well as new customers who just got $ 1,400 richer. ”

In reality, more people are like the woman who told the Associated Press, “I finally got my bills and was able to spend some money. “- $ 500 for modestly priced clothing and shoes and $ 500 for non-perishable supplies. Those non-perishable goods like ketchup and sugar say: this is someone who is still worried about what’s coming. And six in ten people in a Bankrate poll said the $ 1,400 check would only last three months, while one in three said the money wouldn’t last a month. Women in particular, hard hit by the COVID-19 economy, expected to use the money to pay monthly bills and essentials.

Despite the relatively small portion of the COVID-19 aid money that people wanted to spend on consumer goods, let alone unnecessary ones, it was enough for this above-expected increase in retail spending. Sporting goods stores were the biggest beneficiaries, with spending increasing 23.5%. Next came clothing stores, up 18.3%; Motor vehicle and parts dealers up 15.1%; Restaurants and bars saw a 13.4% increase, with rising vaccination rates likely helping people feel safer going out.

Those hikes in spending could in turn lead to a rebound in retail jobs – in fact, March saw its highest employment rate in seven months. However, that’s not all that matters here. These expenses are a moment of growing hope for people who fear not only a deadly virus but also paying their rent or mortgage and feeding their families. And while Congress passed only one-time relief exams, many families with children will soon see the results of the expanded child tax credit, which will help them stay afloat even if the economic recovery takes time to fully materialize.

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