Did State Reopenings Increase Consumer Spending?

Chakrabarti, Rajashri; Heise, Sebastian; Melcangi, Davide; Pinkovskiy, Maxim L.; Topa, Giorgio

Discussion Paper

Did State Reopenings Increase Consumer Spending?

Abstract: The spread of COVID-19 in the United States has had a profound impact on economic activity. Beginning in March, most states imposed severe restrictions on households and businesses to slow the spread of the virus. This was followed by a gradual loosening of restrictions (“reopening”) starting in April. As the virus has re-emerged, a number of states have taken steps to reverse the reopening of their economies. For example, Texas and Florida closed bars again in June, and Arizona additionally paused operations of gyms and movie theatres. Taken together, these measures raise the question of how closures and reopenings affect consumer spending. In this post, we investigate how much consumer spending increased after the reopenings. It is important to stress that we are not expressing any views on the normative question of whether, when, or how states should loosen or tighten restrictions aimed at controlling the COVID-19 pandemic.

Keywords: consumer spending; COVID-19; credit cards; reopening;

JEL Classification: E2;