Discretionary and Nondiscretionary Services Expenditures during the COVID-19 Recession

Jonathan McCarthy

No 20210115, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: The coronavirus pandemic and the various measures to address it have led to unprecedented convulsions to the U.S. and global economies. In this post, I examine those extraordinary impacts through the lens of personal consumption expenditures on discretionary and nondiscretionary services, a framework I developed in a 2011 post (and subsequently employed in 2012, 2014, and 2017). In particular, I show that there were exceptional declines in both services categories during the spring; their recoveries, however, have displayed notably different patterns in recent months, with nondiscretionary services expenditures nearly back to their prior level and discretionary services expenditures seemingly stalled well below their pre-pandemic peak.

Keywords: consumer expenditures; discretionary services; nondiscretionary services; COVID-19 (search for similar items in EconPapers)
JEL-codes: E2 (search for similar items in EconPapers)
Date: 2021-01-15
New Economics Papers: this item is included in nep-mac
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