Study: Consumers Disproportionately Experienced Financial Impacts of COVID-19
The study analyzed data collected by Elevate’s internal thinktank, the
Among the 10,580 people who were surveyed by CNMC, the following key findings emerged:
- Approximately 20% of respondents reported a job loss over the past year.
- Of the 20% who reported a job loss over the past year, 75% of both prime and non-prime respondents said that the job loss or furlough was due to the pandemic.
- Non-prime consumers overall were much more likely to spend a portion of their stimulus on basic needs like food, utilities, housing or medical costs.
- Approximately 50% of non-prime consumers reported spending their stimulus checks on food or groceries versus less than one third of prime consumers.
- Twice the percentage of non-prime consumers spent funds on housing than prime consumers.
- Prime households were much more likely to use stimulus funds for savings than non-prime. This suggests that prime households have achieved increased financial stability and are better prepared for unforeseen expenses.
“The income volatility that resulted from the pandemic put many already financially vulnerable Americans into an even more challenging situation. While we can’t predict when unexpected events such as the pandemic will occur, we can be better prepared. That means equipping both prime and non-prime Americans with the tools and resources they need to make informed decisions about their finances so that they can meet their basic needs, reach their savings goals, and achieve long-term financial stability,” said
Analysis of SpringFour data on consumer demand echoed CNMC’s findings, citing that the organization facilitated 5 million referrals to nonprofit and government agencies in over 30 categories of need since the pandemic began. American households are looking for resources to help them pay for basic necessities, and when unexpected funds are available, such as through a stimulus payment, consumers are likely to use it for those purposes. The authors note that if families were more aware of resources that could help them pay for food, utilities, medical costs and other basic needs, those families might be in a better position to save stimulus funds or contribute those dollars back to the economy in other ways.
“The pandemic demonstrated the precariousness of households’ financial health – and showed that banks, financial institutions, and nonprofits must all prioritize their customers’ financial health. When they do, everyone benefits – customers, companies, employees, and the economy. Now, we all must continue to step up and build on this momentum because none of our customers are immune to financial challenges," said
SpringFour is a