Saving for Sunnier Days

The Franklin Templeton-Gallup Economics of Recovery Study has unveiled many insights about US consumer attitudes and behavior in the wake of COVID-19. Our Fixed Income CIO Sonal Desai examines findings from the survey’s second pulse, including encouraging signs confidence has found a floor.

The second pulse of our Franklin Templeton-Gallup Economics of Recovery Study brings important confirmations of our first results, as well as some powerful new insights:

  • Household confidence seems to have found a floor, but Americans maintain a cautious attitude: three-quarters of those who can save plan to keep accumulating savings over the next six months, and less than one-third already intend to spend more on basic goods and services.
  • Our second pulse also shows that development of an effective vaccine or treatment would have the greatest impact on people’s willingness to fully resume normal spending habits, while even a marked decline in local new cases and fatalities would have a smaller impact on confidence.
  • Most Americans, across party lines, support a new round of government financial support; but we find no evidence that larger enhanced unemployment benefits would discourage work, as a majority of people would prefer the greater long-term security of employment.

Our latest results highlight three encouraging signs that household confidence has at least found a floor:

  • Americans’ willingness to engage in a range of activities has remained stable between July and August. The July resurgence in new cases does not seem to have caused a sustained retrenchment in activity, which bodes well given that new cases have returned on a declining path over the course of August.
  • Mask wearing has continued to increase across the country, continuing a trend that Gallup data identified since April–May, with only marginal differences between Republicans and Democrats.
  • Perhaps relatedly, a rising share of Americans feel confident that they can protect themselves from COVID-19 while out in public—though the share is still no higher than one-third.

At the same time, a strong majority of Americans support continued government help. Over 80% of Democrats as well as 64% of Republicans and 66% of Independents are in favor of another one-time Economic Impact Payment, with a majority across party lines favoring a payment of $900 or more. This strong level of support likely reflects recognition that the economy still faces a major but temporary difficulty.