That is one of the findings of a new paper by a team of five economists at American and Danish universities. Using data on purchases of goods and services (excluding mortgage payments, rent, and utility bills) from a money-management app, the authors examine how the spending of 4,735 Americans has changed for the pandemic. Being users of such an app, the sample is probably younger than the population as a whole.
Consumers did not react uniformly to social-distancing guidelines. Households with children spent more than other households in the early days of the pandemic but later cut back twice as fast as those without, perhaps because parents were less inclined to venture out with their kids. Men seemed more reluctant than women to change their behavior. They didn’t stockpile as much in the early days of the pandemic and reduced their spending by less as restrictions began to bite. Some households may have prepared for the lockdown by taking on more debt. The researchers found that at the end of February credit-card spending rose by more than 60% in a week, on average.
Americans’ appetite for spending remains low. The University of Michigan’s index of consumer sentiment recently recorded its biggest slump since 2008. Spending could pick up in the coming months just as quickly as it fell, in a “V-shaped” recovery. But this may be wishful thinking. Even if Americans do emerge from lockdowns ready to splash the cash, they will have plenty of canned food to finish first.