As Americans are well aware, Congress has still not been able to agree on another stimulus. The lack of another stimulus package has had a significant effect on the country’s economy. According to Fox Business, grocery stores are feeling the effects of this stimulus package impasse. Because Americans have not received another stimulus check from the federal government amidst this unprecedented time in the nation’s history, they are spending less at the grocery store.
This new spending trend comes after the additional $600 in weekly unemployment benefits expired at the end of July. Those checks, along with the one-time $1,200 check that eligible individuals received under the CARES Act, not only helped Americans deal with the struggles associated with the coronavirus pandemic, but they also helped to ensure that the economy stays afloat at this time. Consumer spending reportedly rebounded in both May and July after a significant plunge earlier in the spring, which is when the pandemic began in earnest. Due to consumers spending less on groceries, there could be even lower sales on discretionary items such as clothing and cars.
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A Walmart executive recently explained that since consumers are concerned about their finances in the absence of federal aid, they are subsequently spending less. “People perceive they’re spending more money on food, despite eating out less,” John Furner, Walmart U.S. Chief Executive, said on a conference call last week. “So we’ll be thoughtful about the way we plan the rest of the year and react to changes in the trends we see from our shoppers.” In the past couple of months, there has been much pressure on Congress to enact another stimulus package to help Americans, and the economy, amidst this difficult time. Recently, Dennis Lockhart, the Atlanta Fed president from 2007 to 2017, warned that the U.S. could be headed for a “double-dip recession” if the coronavirus outbreak is not appropriately managed and if Congress is unable to agree to another stimulus package.
“I continue to believe that looking forward you have to consider a range of scenarios and among those scenarios would be, obviously, a pessimistic one and that could be a double-dip,” Lockhart told CNBC’s Squawk Box Asia on Friday. “If things go badly with the management of the virus and there’s more cascading — which (Thursday’s) numbers of initial claims might suggest — then yes, it’s possible we have a double-dip. I don’t think that’s probably the base case, but I think it’s still possible.”
