America went on a huge spending spree in March, thanks in part to the vaccines, and of course, those stimulus checks didn’t hurt. We expected this huge boost in sales, of course, and retail sales in particular have surged 10% since the stimulus money hit our bank accounts.
But honestly, I think the splurge we are seeing and talking about is actually an understatement. The amount of people that are spending this money on shopping, on going out, on feeling like their old selves in a pre-COVID world, is astronomical.
It’s all about access to this money. Companies like PayPal are seamlessly letting people access their third stimulus checks without charging them fees, and then people can spend that money quickly.
I would love to see what the savings rate is a couple months from now – are people really saving their stimulus money? From what I’m seeing and hearing, most are spending it as fast as they can.
According to recent statistics, we are seeing people mostly spending right now on dental and clothing – and that’s why we’re mostly seeing retail sales go up. There’s a lot of pent-up demand and frugal fatigue – and when you mix that together, you are going to see this explosion of buying at least until the summer months.
We’re not just seeing major increases in brands like Target, Walmart and Costco, but we’re also seeing another side to the spectrum, which is an incredible increase in sales for luxury brands, such as Louis Vuitton. What’s basically happening here is people are taking their stimulus money and splurging on themselves. They’ve been indoors for 12 months – they want to look pretty, they want to feel good, they want to buy an exciting new handbag or pair of shoes. Who can blame them?
I have a friend who was telling me that he knows a stay-at-home mom who received $10,000 from the latest stimulus check because of how many kids she has, and she doesn’t even know what to do with the money, so she’s just shopping.
I have a feeling we’re going to see a lot more of this spending trend as we head into the summer months, especially as more and more people get their COVID vaccine. They’re going to want to go away, get out of the house, take a trip, get a new wardrobe, and just feel good for the first time in over a year.