The COVID-19 (coronavirus) pandemic has been disastrous for the economy by wiping out 22 million jobs and costing about $25 billion per day in economic losses, according to St. Louis Fed President James Bullard.
Nearly 160 million Americans (63%) are less than three months away from being out of money, according to WalletHub analyst Jill Gonzalez. As unemployment and work furloughs soar, 84% of respondents in a recent WalletHub survey say they would like to see another round of stimulus checks to fill the cash void.
Gonzalez said the situation is dire for certain populations, namely 75% of low-income households. She said 50% of high-income households are also in jeopardy of financial insolvency within three months should the coronavirus pandemic and subsequent economic shutdown continue.
WalletHub said as there is no shortage of financial hurt the stimulus checks will largely be spent as 43% said they will use the money to pay rent or mortgages, 26% plan to spend it on food or other necessities and 26% said they plan to save the money and 4% will spend the funds on non-essentials like entertainment.
The survey also found some consumers are being quite generous during the crisis as one-third said they plan to donate some of their stimulus to relief efforts.
The respondents were asked if they planned to spend stimulus checks on tobacco, alcohol, or drugs and 9% and answered affirmatively. The respondents largely approved of the stimulus check as a way to help America financially as 65% said this was better than reducing or canceling mortgage or rent payments.
Consumer perceptions as to who most needs the coronavirus relief the most indicate a split between small businesses (50%) and consumer households (47%) just 3% said big business needs the help.
While the respondents seem to overwhelming want more stimulus during this crisis 56% said they did not think anyone should receive unemployment insurance greater than their income before the pandemic. They also have varying opinions as to who should get the stimulus checks from the government. The majority (62%) said everyone is entitled to a check. Another 14% said the stimulus should go only to those who have been furloughed or laid off. That was followed by 13% who said anyone with a pay cut of 50% should be entitled and 9% said a pay cut of 20% and 2% said a pay cut of 10%.
Respondents also wanted to see more loss criteria on the stimulus doled out to businesses. Nearly half (44%) said businesses needed to see revenue losses of 50% to get the aid. Then 30% of respondents said all businesses were entitled. The following 26% said businesses should have revenue losses between10-20% to get the stimulus.
Gonzales said consumers also had varying opinions based on age demographics. The WalletHub survey found millennial respondents (ages 24 to 39) are 25% more likely than baby boomers (ages 56 to 74) to think stimulus checks should go only to people experiencing income loss.