Initial impacts of the pandemic on consumer behavior: Evidence from linked income, spending, and savings data

We use US household-level bank account data to investigate the heterogeneous effects of the pandemic on spending and savings. Households across the income distribution all cut spending from March to early April. Since mid-April, spending has rebounded most rapidly for low-income households. We find large increases in liquid asset balances for households throughout the income distribution. However, lower-income households contribute disproportionately to the aggregate increase in balances, relative to their prepandemic shares. Taken together, our results suggest that spending declines.