Personal consumption in the United States during the COVID-19 crisis

ABSTRACT

Using daily credit/debit card spending data for personal consumption expenditures for the period from 24 January 2020 to 10 June 2020, this paper shows that personal consumption expenditures in the United States have been significantly affected by the economic shocks in the COVID-19 era. The evidence is valid when we consider the data both at the national and state levels. The evidence is also valid when we use the data for consumers at different income levels and consumption within different sectors. The only exception is consumption in grocery and food stores since the effect is dampened at the national level and in 31 of 51 states.

KEYWORDS:

• COVID-19 crisis
• personal household consumption
• United States economy
• Nonlinear unit root tests
• Half-life

JEL Classification:

• E21
• D81
• C22

Acknowledgement

The authors acknowledge the financial supports from the Philosophy & Social Science Fund of Tianjin City, China (TJYYQN19-004)

Disclosure statement

No potential conflict of interest was reported by the authors.

Supplementary material

Supplemental data for this article can be accessed here.

Notes

¹ Given that the first case of COVID-19 in the United States was observed on 20 January 2020, our paper focuses on the COVID-19 era.

² Following Hall (1994), we only report results that use GTS05 as the optimal number of lag method. The results are also robust to other criteria of optimal lag selection.

³ Note that we also observe stationarity in arts, entertainment, and recreation personal consumption expenditures in Louisiana and Nevada, and the half-life values of the COVID-19-related shocks are 51 and 30 days, respectively.