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The articles states as fact there will be negative impacts on long term consumer sentiment and spending without really providing any evidence. Most Americans a
by frockington1 7y ago
The articles states as fact there will be negative impacts on long term consumer sentiment and spending without really providing any evidence.
Most Americans are about to receive a $1200 check and unemployment benefits that pay more than their job did for the next 6 months. I don't think consumer spending is going anywhere soon.
- coldcode 7y agoHow many people on a single $1200 check and unemployment will go out and buy a car, a house, a washing machine or visit a Disney park?
- frockington1 7y agoIn Q1 pick-up sales were up 2%. Granted only half of the quarter was in coronavirus pandemic but it still shows people are willing to spend dollars.
- racnid 7y agoPeople are still going need cars at the same rate they always have.
- rwmj 7y agoFor many people outside the highly paid HN reading bubble that's a huge windfall.
- onion2k 7y agoNot enough to buy a car though, especially if you've also lost your job.
- jointpdf 7y agoIt’s really not. Even in a low cost of living area, $1.2K is about one month of basic living expenses.
- beamatronic 7y ago...which is a huge windfall. Has anyone on here ever actually been poor before? Genuinely curious.
- frosted-flakes 7y agoI grew up in a poor family. Not poor enough that we ever went hungry, but that was partly because of the generosity of friends/family who would sometimes buy us groceries. Us kids certainly never got new clothes (there was a steady stream of hand-me-downs from the older kids and other families we knew). Being self-employed, my dad's income was irregular and often came in $5000 chunks. You might call that a windfall, but my parents were disciplined enough with their money that it automatically went into a savings account for the next mortgage payments, or to pay off credit card debt[1]. We weren't suddenly going out to eat when a cheque came in (in fact, when I was 10 or so, I remember helping my mom enter receipts into her big accounting book, and the total restaurant expenses for the entire year was something like $30). I don't think we were ever officially under the poverty line, but with a family of 11 in a high cost of living area, the money had to go a lot farther than normal. [1]: Unfortunately, they weren't disciplined enough to build up and maintain an emergency fund to carry them through rough times, so they relied on a low-interest credit card for essentials way too often.
- rwmj 7y agoYou're thinking about this wrong: consider it terms of how much floating cash you have available. If you are paid $2000/mo but pay out $1800/mo in living expenses (rent, bills and food), then you have $200/mo to spend on fun. Then you receive a check for $1200, that's 6 months of fun in one go. If you are paid weekly, the amount of cash you have in your pocket might only be $50, and then only on a Friday night, so $1200 looks like an extraordinary windfall.
- jointpdf 7y agoRe: rwmj I used to do taxes for extremely poor (<$10K yearly income) people in Michigan as a volunteer thing. For most of them, I could get the ~$3.5-5K earned income tax credit. A huge windfall? No, these people need that money for basic expenses like feeding their kids. I can guarantee you these same folks—and the millions that suddenly lost their jobs—are not looking at a $1200 check and thinking, “sweet, 6 months of weed money!”. But yeah, I’m “thinking about it wrong”.
- dustingetz 7y agoRealistically if you're poor with credit card debt, $1200 adds two months runway from default dead state of losing your housing, (so at least you're not instantly wiped out as of April's eviction notice date)
- SpicyLemonZest 7y agoGoing out and financing a car loan is practically the canonical thing to do with a sudden windfall in the thousands of dollars.
- jvp 7y agoA house?! Come on.
- rwmj 7y agoThe markets - after a welcome and long overdue correction - are up a few percent, so people seem to be buying in on the expectation of things getting back to normal. Prices seem to be back to 2016/2017 levels. This doesn't indicate to me that people with money believe we're in for a great depression.
- csomar 7y agoOr the $ doesn't buy as it used to in 2016/2017.
- rwmj 7y agoSpeaking as someone who is paid in £, I can tell you I'd much rather be paid in $, especially since the Brexit vote. You guys don't know how lucky you are.
- frockington1 7y agoAt least the Brexit vote was relatively clean in terms of currency with them using the pound. If/when an euro-country things may be even more volatile
- mzarate06 7y agoThe markets are up much more than a mere few percent. Going off closing lows, the SPY is up ~25% from it's ~223 close on 23 March. The Nasdaq Composite is up ~19%. That puts them back at mid-late 2019 prices, not 2016-2017 levels. This all agrees w/your latter point - investors are already bullish again - but I wanted to add data points to supplement the market has recovered much faster than some people realize.
- ericmcer 7y agoNo it puts it at November of last year levels.
- raidicy 7y agoThis is only anecdotal, and I'm probably not representative of the norm but, I will be saving every nearly every penny from UI and the stimulus incentive.
- bwb 7y agoJust a note, unemployment isn't working, that $600 bucks hasn't been reported received by anyone because they are not sure how to deploy it. I am sure it will come, but it might not be for another 3 to 4 weeks. Which if you have bills and rent you might be in big trouble. Does anyone have reports of anyone getting it? None of my friends who were laid off are getting it yet and the states they talked to say they are waiting guidance from the labor department.
- thehappypm 7y agoI have friends who received it, Massachusetts.
- rojondo 7y agoI have received it, New York.
- cryoshon 7y ago$1200 is barely enough for one month for most people. for a lot of urbanites, that check will get eaten by rent more or less immediately. if not this month's rent, next' month's rent, and so on. if not rent, then food. or healthcare. or essential utilities, or car payments. when things get tough and there is scarcity, people save more and spend less. as far as the unemployment benefits go, i think most people will still be very reluctant to spend on anything other than staples until they have a sustainable way of generating income that isn't dependant on a government program. many of today's workers remember the duration of the unemployment benefits offered during the great recession -- and they remember for how many years economic conditions were difficult long after those benefits ended, even including the extension programs. everyone sees that there is a substantial chance of an extended and deep COVID depression which might dwarf the great depression and will certainly dwarf the great recession. you're not going to convince people to spend money in that environment. plus, most of the things people would usually spend on are either explicitly off-limits or unlikely to be purchased in the current situation.
- deleted 7y ago[deleted]
- CydeWeys 7y ago> $1200 is barely enough for one month for most people. It's only enough if you stop paying your mortgage/rent and utilities. It's certainly not enough for most people if they still have those expenses on top of everything else. Though, admittedly, lots of people are getting substantially more than that -- a married couple earning even into six figures gets $2,400 plus $500 per kid.