JPMorgan's U.S. credit card holders spent 40% less due to coronavirus
Elizabeth Dilts Marshal
NEW YORK (Reuters) - Credit card spending among some of JP Morgan Chase & Co’s U.S. customers fell 40% during March and early April compared to last year, as Americans stayed home to protect against the novel coronavirus, according to a new report on Thursday.
The over time as layoffs, furloughs and unemployment insurance further impact families’ bank accounts,” Farrell said in a statement.The overall fall in spending was 8 times larger than the average drop in household credit card spending in the first month of unemployment during regular times, according to the report.
The global outbreak of the coronavirus has forced governments worldwide to impose lockdown orders to contain its rapid spread, crippling economic activity.
In the United States, more than 32 million people have filed for unemployment benefits since March while consumer demand has also been hard hit.
The U.S. Federal Reserve warned this week that the country will likely see weak economic growth for “an extended period”.
The JPMorgan Chase Institute studied anonymized spending data from more than 8 million Chase credit card customers for the period from March 1 to April 11.
Credit card users who report household incomes of less than $39,000 reduced spending by 38%, while wealthier cardholders, with incomes of more than $92,000, reduced spending by 46%. The group says the difference largely reflects higher average spending by wealthier households.
The report showed essential spending, like on groceries and healthcare, initially spiked by 20% before falling back.
Spending on non-essential things fell by 50% and dropped 70% on restaurants.
The group tracked only spending on Chase credit cards, like its Slate, Sapphire and Ink cards. It did not track spending with cash, debit cards or other bank credit cards.
(In 10th paragraph, group changed income figures in subsequent draft of report)
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