“The more you push the stimulus button, the less effect you see,” said Scott Anderson, chief economist at Bank of the West in San Francisco. And the sectors hardest hit – hospitality, entertainment, and travel – are unlikely to see much of a boom right now as consumers be wary of going out or living in states like California and New York, where dining and other restaurant activities are restricted .
Mr Anderson said the incentive could add to some of the inequalities that have become apparent over the past year. Many employees work from home and have largely been spared layoffs – the unemployment rate for university graduates is now only 4.2 percent.
But poorly paid service workers have been hit hard and the unemployment rate is 7.7 percent for people with just a high school diploma. Well-off households, Anderson said, could spend the money on stocks or use it to buy a house, which “could exacerbate a bubble that forms in some assets such as stocks and residential property.”
Julia Bald, a librarian who lives in Beverly, Massachusetts, doesn’t want to bet on the stock market, but plans to bank her stimulus check as a precaution. If the virus rises again and the library has to close, she fears it could be released. Ms. Bald also has $ 10,000 in student loan outstanding and is trying to save as much money as possible.
“I haven’t had any major financial difficulties, it’s not that I have to worry about the rent back or anything,” said Ms. Bald, 30. “But my nervousness about where the economy could go from here makes me feel like it to just save them. ” in the case.”
Dennis Helmstetter of Frederick, Md., Also plans to save the $ 600 payment. He has managed to keep not one but three jobs during the pandemic – as a real estate agent, clerk at Fort Detrick, and manager of the bar and restaurant at his local Elks Lodge.
By not spending on travel, dining, or entertainment, he saved more money than usual: putting away about $ 1,000 a month. While enjoying the extra boost in his savings, the 65-year-old Helmstetter believes that Congress should be more direct to the people in need.
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