Consumption Spending during the COVID-19 Pandemic
We use a novel empirical approach to decompose the impact of different economic, demographic, and COVID-19–related factors (such as lockdowns, case counts, and vaccination rates) on consumption spending on a week-by-week basis during the pandemic. This allows us to study how demographic and economic groups were differentially affected by the pandemic while crucially controlling for other factors. Our results imply that Hispanic and college-educated populations showed particularly large and persistent declines in relative spending. We also compute the relative importance of factors in driving consumption spending differences. We find that spending differences were persistently driven by political affiliation, age, education, and COVID factors. At a more disaggregated level of spending, political affiliation and COVID factors had a much stronger and more persistent impact on spending that was social-distancing sensitive (SDS), such as travel and restaurant dining, than on non-SDS spending.