While the economy has ultimately been thrown into a recession because of the coronavirus, consumers continue to spend. CivicScience has been tracking the radical shifts in consumer spending, seeing major upticks in food and grocery delivery services and video streaming, in particular.
Where people are spending money has changed (check out the visual in this New York Times article), but so have how people feel about spending and how much they are spending.
A recent survey of 3,000 U.S. adults shows that more people feel bearish about spending than anything else. Nearly 50% feel the desire to spend less than usual, while just over 40% feel the same as prior to social distancing and stay-at-home orders.
However a small minority (7%) feels inclined to spend more than usual. Age is a significant factor there — 18- to 24-year olds are about a third more likely than Millennials and Gen X to want to spend more, and more than twice as likely as Baby Boomers.
How does that sentiment translate to actual spending? Current CivicScience tracking shows that overall, 14% report spending more, but that number’s overshadowed by 62% of U.S. adults who report curtailing spending.
Splurging on Items
While Americans are spending less overall on a weekly basis, that isn’t stopping some from splurging on an item or two. A larger-than-expected percentage of people (17%) say that since the onset of social distancing and stay-at-home orders, they have actually gone ahead and splurged on an item that they weren’t planning to purchase, or at least not for several more months.
Looking further into the data, these splurgers are more likely to be younger (18- to 29-year-olds), non-parents, and currently unaffected financially by the lockdowns. Those whose hours, pay or job status have been affected (making up 29% of the population, according to current CivicScience data) are the most unlikely to have splurged on anything, but 15% still have.
Splurging may be a way to deal with looming job stress and fear. Data also show that those who have splurged on an item are more likely to say they manage their money badly and have trouble controlling spending.
What are people splurging on, and how much are they spending? While more research is needed to answer these questions, the survey does show that splurgers are more than three times as likely as non-splurgers to say they are shopping online more as the result of social distancing and stay-at-home orders.