$1,400 Stimulus Checks Mean America Is Going on Vacation?
Despite fresh warnings from the U.S. Centers for Disease Control and Prevention regarding highly contagious COVID-19 variants circulating around the country, since mid-March, there have been more than one million passengers each day traveling through U.S. airports, with the numbers boosted even more by spring break and Easter travelers.
According to their latest update, the Internal Revenue Service and U.S. Treasury already have disbursed one hundred fifty-six million coronavirus stimulus checks worth $372 billion under the $1.9 trillion American Rescue Plan.
And what the data from the Transportation Security Administration (TSA) is saying is that millions of Americans are tapping into those funds and packing their luggage for long overdue vacations due to the ongoing pandemic.
Despite fresh warnings from the U.S. Centers for Disease Control and Prevention regarding highly contagious COVID-19 variants circulating around the country, since mid-March, there have been more than one million passengers each day traveling through U.S. airports, with the numbers boosted even more by spring break and Easter travelers.
Moreover, the numbers are rising heading into the crucial summer vacation season.
“What we have seen is that we have surges after people start traveling, we saw it after July 4, we saw it after Labor Day, we saw it after the Christmas holidays,” CDC Director Dr. Rochelle Walensky recently said during a press briefing.
The change in travel behavior, however, is welcome news for struggling airlines that are once again expected to report sizeable losses this quarter. Last year alone, they combined for losses that surpassed $30 billion.
Other recent data, though, is suggesting that many Americans aren’t splurging on vacations at all—instead, they are saving a large chunk of their stimulus checks.
According to a new poll conducted by the Federal Reserve Bank of New York, it revealed that U.S. consumers are putting away 42 cents of every dollar received from the third round of stimulus checks that were sent out last month. Moreover, less than 25 percent of the money is being spent and the remainder is being tapped into to settle outstanding debts.
In contrast, for the first two rounds of the stimulus checks, households spent a greater amount of the money on daily living expenses, the poll further showed.
The researchers added that it is certainly possible that some consumers are saving more of the stimulus funds because of limits on the activities they can do during the ongoing pandemic. These consumers may spend more of those savings as the economy gradually reopens.
In another recent research conducted by bill pay service doxo, it calculated that roughly 62 percent of stimulus checks are being spent on bills, such as those to utility companies and mobile phone carriers, with a large portion of that focused on paying off outstanding credit card debt.
Back in October, doxo discovered that 42 percent of Americans skipped at least one bill because of the economic effects of the pandemic. Moreover, 30 percent tacked on credit card debt.
“Our data shows that more than half of all Americans have seen a reduction in income as a result of the COVID-19 crisis. It is therefore no surprise that many have also struggled to pay their bills over the last seven months since the pandemic started,” Jim Kreyenhagen, vice president of Marketing and Consumer Services at doxo, said in a statement.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.