- As COVID-19 pandemic continues and many companies extend remote work arrangements, consumer spending follows an unusual course for uncertain economic times
- Spending up in areas such as home renovations, takeout, and grocery shopping
- Pandemic highlights disparity between wealthier and poorer households, with diminished consumer confidence at lower income levels
As the COVID-19 pandemic continues, Americans are spending more time at home amid an extension of remote work arrangements and fewer opportunities for social outings. This trend has concentrated more spending on the home, with some companies seeing a considerable boost to their earnings.
The pandemic has generated fears of an economic recession as jobless claims remain at elevated levels and business owners struggle with lower revenues. But while spending on discretionary items such as home furnishings and appliances typically contracts during such uncertainty, the unique circumstances of the pandemic have upended this pattern. Whirlpool and Home Depot have reported higher sales, and P&G has also reported higher earnings on home care products.
Earnings reports have also shown stronger demand for takeout and early returns for holiday shopping, with companies like Chipotle and Mattel benefiting. Grocery sales have cooled after posting major gains earlier this year due to panic buying, although they remain above 2019 levels. These companies have also been preparing for another potential increase in consumer demand due to concerns over a surge in COVID-19 cases.
The pandemic has highlighted wealth disparities, with a recent survey showing consumer confidence improving for middle- and high-income workers but plunging for those earning less than $50,000 a year. A majority of respondents in this survey said they were less comfortable than they were six months ago with making major purchases, such as a home or car, as well as household purchases.
