The Impact of COVID-19 on US Consumer Spending: Quantitative Analysis Using High-Frequency State-Level Data

Satoshi Kobayashi, Kaori Nakahara, Takemasa Oda and Yoichi Ueno
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Satoshi Kobayashi: Bank of Japan
Kaori Nakahara: Bank of Japan
Takemasa Oda: Bank of Japan
Yoichi Ueno: Bank of Japan

No 20-E-7, Bank of Japan Review Series from Bank of Japan

Abstract: According to macroeconomic statistics, consumer spending in the United States, after falling sharply due to the COVID-19 pandemic along with the strict public health measures, has started to increase again since May. However, a closer look at high-frequency data shows that the pace of recovery in consumer spending has slowed since the latter half of June, when new infections began to increase again. Using weekly state-level panel data, this study quantitatively examines the impact of various factors that have affected US consumer spending during the pandemic. The empirical results suggest that US consumer spending has been (1) strongly affected by the strict public health measures such as the stay-at-home orders put in place, (2) pushed down by the renewed increase in new infections since the latter half of June, and (3) boosted to some extent by fiscal measures such as the Economic Impact Payments.

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