Most Americans are spending their stimulus checks on immediate needs, like groceries and rent. Still, some retailers reported last week that many shoppers are buying non-essential items, like electronics and sporting goods. Millions of Americans received their $1,200 Economic Impact Payments as early as mid-April, while some are still looking to receive payments as physical checks in the mail. There are several ideas for new coronavirus relief packages in Washington that would include a second payment, although none have passed.
During a Walmart earnings call Tuesday, CEO Doug McMillon referred to Americans buying non-essential products as "relief spending" that "was heavily influenced by stimulus dollars. This is ultimately leading to sales increases in categories such as apparel, televisions, video games, sporting goods, and toys," reports MarketWatch. Apple CEO Tim Cook also said his company saw an increase in demand for their products on April 30. Walmart and Target reported more shoppers bought televisions, electronics, clothing and gaming equipment, while Walmart saw a new interest in bicycles for adults.
Even BJ's saw "relatively significant growth" in electronics and television sales, CEO Lee Delaney said Thursday. "We would imagine that there is certainly an impact from stimulus checks that are impacting the business," he added. "But I think it's right to assume there is some benefit flowing through from stimulus checks in the business."
Best Buy CEO Corie Barry told investors there had been an increase in sales of computer and video game equipment. Even though the stores have been closed, Best Buy offered curbside pick-up and continued online sales to keep the business alive during the stay-at-home orders. "Like many other retailers, we saw sales benefit during the last three weeks of the quarter as customers undoubtedly chose to spend some of their government stimulus money on the products and services we provide," Barry explained.
Last week, economists from several universities, including Columbia, Northwestern, University of Chicago, and Southern Denmark, shared findings of a recent study examining stimulus checks to MarketWatch. The results examined those receiving stimulus checks by April 21, reported how Americans began spending more than usual on food and non-durable goods within the first three days of receiving payments. Within the first 10 days after receiving their chicks, the 1,600 respondents said they spent one quarter to one-third of the amount. How much Americans spent was also determined by how much they had in their bank account. Those with under $500 in their bank accounts spent at least half of the payment within 10 days, while those with over $3,000 in their bank account did not spend more than they would under normal circumstances in the same period.
Although the House of Representatives passed the $3 trillion HEROES Act, which includes a second stimulus payment, earlier this month, it is not going to pass the Senate as is. President Donald Trump voiced support for another stimulus check, but the Senate is on a week-long Memorial Day recess, meaning nothing will be passed until June. Senate Majority Leader Mitch McConnell has not been in a rush to pass another relief package, instead of looking to see more results from the packages already passed.0comments