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One of the biggest factors for determining whether or not a second round of stimulus checks will happen is what the economic effect has been from the first round of checks. In other words, how are consumers spending their stimulus check money?
Well, some new evidence reveals where some of that spending has been going since last month.
Walmart’s U.S. CEO John Furner believes that the checks have helped, as he stated on on Yahoo Finance’s The First Trade.
“We were softer in Easter than what we had expected to be and weren’t sure if that’s where things were going to be for some time. A few days after the stimulus checks began to land, people were settling in at home. Call it the third phase of shopping during the pandemic,” said Furner.
“Categories like sporting goods and bicycles, fabrics and crafts, toys, the stay-at-home categories, networking [equipment], really took off. We had a pretty strong start to the month of May as well. General merchandise has remained strong. Definitely we do see a positive impact from the checks.”
It’s understandable why some of these products are being purchased. Sporting goods and bicycles are being purchased by families who now are resorting to exercise from their homes. Toys are needed to keep kids entertained and occupied. Fabrics and crafts are being used to construct face coverings and also for those interested in do it yourself projects.
Best Buy also has seen an uptick in certain types of purchases.
According to MarketWatch, “At Best Buy, customers used their stimulus checks to buy computing and gaming equipment, Corie Barry, the company’s CEO, said.”
Once again things like video games are keeping people entertained during this pandemic.
Even Apple believes it has seen an increase in sales due to the checks.
I think a lot of these purchases show that for those who don’t need the stimulus checks purely for essential needs, such as groceries or paying bills, they are willing to spend for discretionary purchases.
Those seem like spending habits that would help spark some level of beneficial economic activity to me. So it seems like the stimulus checks have at least done what they were supposed to do in part.
It would seem like those checks served the purpose of 1) helping Americans avoid going without essential needs and 2) helping to spark or at least mitigate a drop in the economy.
I guess the bigger question is what type of measurable effect do the checks have on the economy as a whole? And what type of effect will be needed in order for Republicans to feel good about approving a second round of checks?
I haven’t seen data on that yet and it might still take a little bit more time to figure that out.
Waiting to see how the checks are used is just one reason why Republicans in the Senate might want to take extra time before considering approving another round of stimulus checks.
But in my opinion these are positive early indicators that money is getting put back into the economy just as the plan was intended.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.