The third round of coronavirus relief checks, which have been sent to 159 million households so far, were directly linked to an historic rise in household income, according to reporting by the Wall Street Journal.
Household income rose 21.1% in March after President Joe Biden signed the $1.9 trillion coronavirus relief package into law, following months of stonewalling by Republicans, who spent much of 2020 claiming that additional aid to help families struggling to pay for housing and other necessities was unaffordable.
The immediate rise in household income from the previous month represented the largest increase since 1959, the Journal reported, citing data from the Commerce Department’s Bureau of Economic Analysis.
“This is what happens when you opt for investing in working people over trickle-down economics,” said the grassroots organization Tax March.
Stimulus checks and increased vaccination access are fueling this recovery. This is what happens when you opt for investing in working people over trickle-down economics. #BuildBackBetterhttps://t.co/HSpEh7ve5H— Tax March (@taxmarch) April 30, 2021
Economists expect household income—the amount Americans received from wages, investments and government programs—rose 20% in March from the previous month. That would mark the largest monthly increase for government records tracing back to 1959. https://t.co/LeZnPfYPAa— Linda Hill (@bulldoghill) April 30, 2021
The report follows two studies conducted last year after the first round of relief checks were shown to markedly alleviate poverty—illustrating the fact that “poverty is a policy choice,” according to advocacy group People for Bernie.
The new data regarding the latest round of checks shows “the fiscal stimulus was a roaring success,” tweeted CNBC reporter Carl Quintanilla.
Households were promptly able to save significantly more money following the release of the checks, with the rate of personal savings increasing from 13.9% in February to 27.6% in March, according to the Journal.
Spending rates also saw the largest month-to-month increase since last summer, rising by 4.2%.
“Stimulus checks work,” tweeted Baltimore attorney Katelynn Brennan.
breaking news, stimulus checks work https://t.co/e0SnxHrqPJ— Katelynn Brennan (@kbrennanesq) April 30, 2021
As NBC News reported earlier this month, a plurality of households have been spending their relief checks on groceries, rent, and other necessities. Forty-five percent of respondents to a survey by Bankrate.com said their checks went to monthly bills, while 32% said they were using them to pay down debts.Just 13% reported they were using the money for discretionary spending.
Federal Reserve Chairman Jerome Powell told reporters that while higher rates of spending could drive inflation in the coming months, “an episode of one-time price increases as the economy reopens is not the same thing as, and is not likely to lead to, persistently higher year-over-year inflation into the future.”
“Indeed, it is the Fed’s job to make sure that that does not happen,” Powell said.