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COVID-19 Stimulus Payments Inspire Saving Over Spending

By Refinitiv. Originally published at ValueWalk.

COVID-19 Stimulus Checks Spend

The U.S. government is sending another round of checks meant to stimulate economic activity during the coronavirus pandemic. How will Americans spend their stimulus checks?  In a collaboration with Maru/Blue Public Opinion, Refinitiv discovered how U.S. citizens plan to utilize this new round of funding.


Q3 2020 hedge fund letters, conferences and more

COVID-19 Stimulus Payments Inspire Saving Over Spending

  • How do Americans plan to spend their stimulus checks?

    • 44%, plan to save the money; 36% will pay off debts; 20% will spend the funds

COVID-19 Stimulus Checks

Source: Maru/Blue Public Opinion Survey

  • Increasing National Debt

    • The deficit and national debt have risen significantly due to the federal stimulus programs

      • End of 19Q4 the U.S. public debt-to-GDP ratio was 106.7% and increased to 127.3% at end of 20Q3
    • The Cares Act (pandemic-related costs and relief measures) have brough the U.S. to its highest public debt levels in more than 70 years

COVID-19 Stimulus Checks

Source: Refinitiv Datastream

    • Although intended to fuel economic activity by consumers, a large portion of Americans are telling us they’ll be saving their stimulus checks followed by paying off debt

      • 1 in 5 Americans intend to spend stimulus checks
      • Refinitiv earnings forecasts suggests 21Q1 will be the first positive quarter in over a year as retailers will face easier YoY comparisons
        • Household Durables, Internet & Catalog Retail and Leisure products may even receive a boost from stimulus check spending
  • Rising Personal Savings
    • Personal savings rates are up:

      • Beginning of 2020, personal savings rates were at 7.6%; April 2020, 33.7%; December 2020, 12.9%
      • Experienced similar personal savings activity during the global Great Recession (December 2007 – June 2009)
  • Spending the Stimulus Check
    • Approximately 10 million Americans are unemployed and most likely to spend stimulus checks on basic living expenses, groceries, rent and mortgage

COVID-19 Stimulus Checks

Source: Maru/Blue Public Opinion Survey


Sources: Data/Charts – “Refinitiv” and “Maru/Blue Public Opinion Survey” respectively

Commentary – “Jharonne Martis, Director of Consumer Research, Refinitiv

Learn more about StarMine analytics and models – suite of proprietary alpha-generating analytics and models, grounded in sound economic intuition and backed by rigorous analysis.

The post COVID-19 Stimulus Payments Inspire Saving Over Spending appeared first on ValueWalk.

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