How COVID-19 Has Impacted Spending Levels In The U.S. [Infographic]

Dr. Anthony Fauci has warned of a “disturbing surge” in U.S. coronavirus cases as seven states reported a record increase in infections as well as a record number of patients admitted to hospital. The situation is already raising serious questions about whether the Trump administration moved to reopen the economy too quickly. While the coronavirus curve has once again shifted upwards, how is America’s spending curve looking? Opportunity Insights researchers at Harvard University have been tracking U.S. consumer spending throughout the pandemic using credit card data and they have found that things are indeed recovering, albeit slowly.

As the following infographic shows, U.S. consumer spending nosedived between the middle and end of March. When President Trump declared a national emergency on March 13, total U.S. consumer spending was 0.5% higher than the same period in 2019. By March 30, it has plummeted 33%. By June 15, the annual percentage difference in spending had recovered and narrowed to approximately 10%. Interestingly, there is a considerable gulf in spending between low and high-income households. By June 15, the former were only spending 3.4% less than in 2019. Wealthier households, by contrast, were spending 14.4% less than on the same day last year.

This could prove quite problematic as consumer spending is a key driver of economic activity. Nathan Hendren, an economist at Harvard and co-founder of Opportunity Insights, was quoted by NPR. Referring to higher spending levels among lower income households due to stimulus checks, he said that “the wealthy are not matching them” and that ” for higher-income individuals, that spending is still way far off from where it was prior to COVID and it has not recovered as much”. He added that it could prove potentially crippling as “the wealthiest 25% of Americans account for fully two-thirds of the total decline in spending since January”.

*Click below to enlarge (charted by Statista)