On average, American households spent a relatively small portion of their coronavirus stimulus checks, and expect to spend even less of a possible second payment, prioritizing saving and debt reduction instead, according to a new Fed survey.
On average, American households spent a relatively small portion of their coronavirus stimulus checks, and expect to spend even less of a possible second payment, prioritizing saving and debt reduction instead.
The Federal Reserve Bank of New York has been adding special pandemic-related questions to its monthly Survey of Consumer Expectations, such as collecting data from U.S. households in June on how they spent their first CARES Act stimulus check, and in August on how they’d spend a second check, if they receive one.
The stimulus payments signed into law in late March totaled $1,200 for every adult, plus $500 for each child, resulting in a median payment per household of $2,400. In its August survey about how Americans would likely allocate a second payment, the Fed posed a hypothetical $1,500 check.
See related: Many U.S. adults plan to spend less after the pandemic than before
Respondents reported spending and donating less than a third (29%) of their first stimulus payments, with 18% going to daily living expenses, 8% to nonessential purchases and 3% to donations.
In contrast, an average of 36% of the first checks was put into savings, and another 35% was applied to debt. Among different generations, consumer aged 41-60 reported allocating the most for debt reduction (41%) and the least for savings (33%).
When considering how they’d use a possible second stimulus payment, the amount households expect to spend and donate dropped to just 24%, while savings jumped to 45%. Reducing debt remained the second priority, accounting for an expected 31% share of a second check.
The New York Fed’s Survey of Consumer Expectations (SCE) is a nationally representative, internet-based survey of about 1,300 U.S. households, with the stimulus check data collected between June 10-30 and August 6-21. Findings were released Oct. 13.