The COVID-19 pandemic has had a major impact on the finances of U.S. households. Researchers and practitioners from across the country are trying to grasp the extent of the impact on household finances. Early research has started emerging that can inform the financial counseling practice as we work to assist clients through these unprecedented times. Below is a brief overview of two working papers on household spending.


Title: Initial Impacts of the Pandemic on Consumer Behavior: Evidence from Linked Income, Spending, and Saving Data

Authors: Natalie Cox, Peter Ganong, Pascal Noel, Joseph Vavra, Arlene Wong, Diana Farrell, Fiona Greig

University of Chicago, Becker Friedman Institute for Economics Working Paper No 2020-82

Available at:

The authors used U.S. household-level bank account data (transactions made on Chase debit and credit cards through June 3, 2020) to investigate the effects of the pandemic on spending and savings. They used three samples to separately study debit card spending, checking account balances, and credit card spending. Some of the samples are partially overlapping, meaning that some individuals were in more than one sample described below.

  • Sample 1 – Debit Card Spending: Composed of individuals with Chase non-business accounts deposit accounts who made at least three debit card transactions monthly from January 2018 – March 2020, had at least $12,000 in income in both 2018 and 2019, and had at least five transactions every month in 2018 and 2019. The final sample was just over 4 million individuals.
  • Sample 2 – Checking Account: Same as sample 1, but they did not impose the limit of at least three debit transactions in every month from January 2018 – March 2020.
  • Sample 3 – Credit Card Spending: Sample of 8 million families who had at least three transactions every month of their credit cards since January 2018.

The study found that individuals across all incomes cut spending at the start of the pandemic. High-income households cut spending more than low-income households. Workers in all industries cut spending and then workers in low wage industries spending recovered more quickly. While debit card spending declined, so did credit card spending. Credit card spending showed some signs of recovery in May, but remained roughly 28% below pre-pandemic levels at the end of May.

The authors did not have information on debit card spending by spending category, but they did for credit card spending. They split spending into two categories of essential (fuel, transit, cash, drug stores, discount stores, auto repair, groceries, telecom, utilities, insurance, and healthcare) and non-essential (department stores, other retail, restaurants, entertainment, retail durables, home improvement, professional and personal services, and miscellaneous, flights, hotels, and rental cars). All spending declined, but spending declines were much steeper in non-essential categories, which match shelter-in-place orders and business closures. However, they did find that in the first few weeks of March there was a temporary surge in spending on groceries, discount stores, and pharmacies.

In relationship to household liquid balances, the study found that there was an increase in household liquid balances. Private savings increased over the pandemic, which the authors stated were due to a combination of declines in spending and increases from stimulus. Lower income households saw the largest growth in liquid savings during the period, which was likely due to stimulus payments.


Title: How Does Household Spending Respond to an Epidemic? Consumption During the 2020 COVID-19 Pandemic

Authors: Scott R. Baker, R.A. Farrokhinia, Steffen Meyer, Michaela Pagel, Constantine Yannelis

National Bureau of Economic Research Working Paper 26949

Available at:

The authors analyzed de-identified transactional-level data from a non-profit Fintech company. The primary data consisted of daily data on each user’s spending and income transactions from all linked checking, savings, and credit card accounts for dates from August 2016 – March 2020. The total sample was 44,660 users, looking only at a sample of users who updated their accounts in March 2020 they had complete data for 4,735 users. Each user was required to have several transactions per month in 2020 and have had at least $1,000 in total during the first three months of 2020.

The study found that spending in January and February were relatively flat and then there was a sharp spike in spending between February 26 and March 10, as COVID-19 cases began to spike across the U.S. This initial spike was then followed by depressed levels of general spending by about 50%. This shows that U.S. households were stockpiling prior to shelter-in-place orders. Spending throughout March changed. For example, spending decreased in public transportation, restaurants, and air travel while spending increased in groceries, retail, and food delivery.


Both of these working papers describe transactional data related to household spending in response to the COVID-19 pandemic. They both found that spending increased in early March 2020 and then fell sharply throughout the early weeks and months of the pandemic. While the financial counseling profession can use this information to gather some initial insights into how households initially responded to the pandemic, additional data is needed to inform how we help clients through these trying times.

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