The US economy is significantly stronger today than it was two years ago when the COVID-19 outbreak began.
As a result of recent inflation, many workers — notably lower earners — have experienced a salary increase, though the effect has been muted.
Last year’s epidemic and its economic ramifications caused even greater uncertainty and dread, with high unemployment and entire sectors of the economy closing.
With unprecedented financial assistance for American consumers and businesses, the federal government responded in 2020 and 2021 with three big stimulus packages.
Economic Impact Payments (EIPs) to US households were a defining component of Congress’ economic relief efforts. The quantities and eligibility for each package varied, but most low- and middle-income families received $3,200 per adult, with more for those with dependents.
With many industries failing, these reimbursements were provided to help households cope with lost jobs or wages due to COVID-related disruptions.
The CARES Act payments were a considerable aid to many households in managing ordinary living expenses, according to a July 2020 U.S. Census poll.
Around 150 million Americans utilised their stimulus packages to fund living expenditures, significantly more than paid off debt or saved the money.
Due to the economy being shut down in the spring and early summer of 2020, the federal government’s supplementary relief helped families who would otherwise have struggled to make ends meet.
Despite the CARES Act’s initial popularity, later rounds of stimulus payouts drew increasing criticism. These sceptics predicted that broad-based stimulus would provide wealthy households more money than they needed, possibly causing inflation.
Some economists and officials advocated for smaller, means-tested transfers to the poorest families.
Less needy households used their stimulus payments differently than more needy households, according to the Census survey data. Minority and low-income households were most likely to use stimulus funds for living expenses.
More than 75% of Black adults (75.9%) use stimulus cheques for living expenses, compared to only 60% of White individuals. Adults with household incomes below $35,000 used stimulus money for living expenses at a rate nearly five times that of adults with household incomes above $200,000. (15.7 percent ). Less likely to pay off debt, save money, or buy unnecessary stuff.
Given the demographic and economic trends, the Southern U.S. had the biggest share of adults spending their checks for living expenditures.
Eight of the ten states with the highest adult usage of stimulation are in the South, including Louisiana (74.4%) and West Virginia (WV) (72.1 percent ). In metro areas, four of the top five cities were in the South.
This study utilises data from the US Census Bureau’s Household Pulse Survey. HireAHelper calculated the share of adults who reported using stimulus to meet living expenses to identify where residents had to spend stimulus checks.
Researchers also included data on how many persons used stimulus cash to pay down debt or save.
The study found that in Kentucky, 65.1% of adults used stimulus funds for living costs, 14.3% for debt repayment, and 8.6% for savings. Here is a summary of Kentucky data:
• Adults who utilised stimulation to pay bills: 65.1%
Debt-paying adults: 14.3%
• Adults who employed stimulation to save: 8.6%
• Adults not receiving stimuli: 11.9
Across the US:
• Adults who utilised stimulus to pay bills: 63.9
Debt-paying adults: 12.0%
• Adults who used stimulation to save: 9.4%
• Adults not receiving stimuli: 14.7%