President Donald Trump is ready to sign a “big, beautiful stimulus,” he said during a Thursday night town hall, despite ongoing talks that include skeptics in the Republican-controlled Senate and, earlier in the month, when he said he was done negotiating.
Trump’s willingness might be a ray of hope for Americans badly in need of money, but a new survey suggests many people aren’t waiting for more government assistance before getting their financial affairs in order.
People appear to be paying down debt, and saving money for another rainy day. Economic impact payments distributed in March were mostly used to increase savings accounts and pay down debt, according to a study published this week by the Federal Reserve Bank of New York.
And if there is a second stimulus check? “Respondents are expecting to spend an average 14% on essential items and an average 7% on non-essential items,” the Fed said. “Our survey results indicate that households expect to consume even smaller shares of a potential second round of stimulus payments, while they expect to use a higher share to pay down their debt.”
‘While it may seem counterintuitive that more people are planning ahead during such a volatile time, it may be precisely the uncertainty of the current moment that makes planning so compelling.’
“These findings indicate that the economic impact payments, by increasing both household income and the debt pay down, contributed importantly to the sharp increase in the overall saving rate during the early months of the pandemic,” it added.
A separate survey released earlier this week suggested people are planning ahead with or without a new stimulus check. Nearly two-thirds (64%) of Americans are planning ahead financially this year, compared to the 59% doing it one year earlier and the 60% doing so in 2018, according to an annual survey from the Financial Health Network, a non-profit organization focused on consumer health and resilience.
The Democratic-controlled House of Representatives passed a $2.2 trillion coronavirus relief bill earlier this month. The White House proposed a $1.8 trillion package instead, which was rejected by the House Speaker Nancy Pelosi as too little and also Republicans who said $1.8 trillion is too much.
“While it may seem counterintuitive that more people are planning ahead during such a volatile time, it may be precisely the uncertainty of the current moment that makes planning so compelling,” researchers wrote.
“Without knowing when the next round of stimulus and relief measures will arrive, many…