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Coronavirus update: Savings rate soars with no place to spend, Chicago delays reopening

Stimulus payments look like junk mail

Photo (c) Yakobchuk - Getty Images
Coronavirus (COVID-19) tally as compiled by Johns Hopkins University. (Previous numbers in parentheses.)

Total U.S. confirmed cases: 1,725,656 (1,703,989)

Total U.S. deaths: 101,706 (100,651)

Total global cases: 5,851,494 (5,731,837)

Total global deaths: 361,270 (356,606)

Savings rate hits record during pandemic shutdown

With U.S. households confined to their homes for the last two months, Americans have socked away a record amount of cash. The U.S. Bureau of Economic Analysis reports that personal income rose sharply in April as Americans began receiving government stimulus payments.

At the same time, consumer spending dropped sharply, leading to a savings rate of 33 percent, the highest on record. 

It’s always a good thing when households are able to save money, but some economists think too much saving won’t help the economy recover. They say the next few weeks may be critical as consumers have more chances to spend at stores and restaurants.

Chicago’s reopening has been delayed until next week

Illinois joined a number of states in reopening most businesses, including hair salons, restaurants, and retail stores. But Chicago will wait until next week to join the party.

Chicago Mayor Lori Lightfoot has delayed the city’s limited reopening until Wednesday, June 3 after Dr. Deborah Birx, the coordinator of the White House coronavirus task force, expressed some concern about the city. She said the number of cases in Chicago appears to have leveled off but has not gone down as it has in some other parts of the country.

In the rest of Illinois, restaurants can open outdoor dining areas with tables six feet apart. Retailers can reopen with no more than 50 percent of normal capacity.

Some stimulus payments mistaken for junk mail

Millions of Americans are still receiving their economic impact payments from the government, and some are mistaking them for junk mail. The Treasury Department has shifted from sending paper checks to sending prepaid debit cards that many recipients say look like credit card solicitations.

Reports have begun to circulate on social media about recipients cutting up the cards or tossing them in the trash, unaware that the card contains their long-awaited payment.

The latest round of payments come in plain white envelopes with the return address: Money Network Cardholder Services, PO Box 247022, Omaha, NE 68124-7022.

Mixed data on housing

The coronavirus has had a huge impact on the housing market, bringing sales and listings to a near standstill. Where the market goes from here isn’t exactly clear.

In its monthly statement, the National Association of Realtors (NAR) reported that pending home sales plunged more than 21 percent in April. That category is a measure of contracts for home sales that were signed but not yet closed. NAR said that’s likely the low for the year.

At the same time, Zillow reports there is evidence that both buyers and sellers are returning to the market. However, it notes that inventory levels are still extremely tight, leading to higher prices for the homes that are selling.

Prescriptions for hydroxychloroquine surged in March

After President Trump mentioned the 60-year-old antiviral drug hydroxychloroquine at a briefing in March, prescriptions for the drug surged by 2,000 percent

Researchers at Brigham and Women’s Hospital and Harvard Medical School compared the number of prescriptions issued from March 15 to March 21 with the same period in 2019. This year there were 45,858 prescriptions written compared to 2,208 the year before.

A number of health experts have been highly skeptical of the drug as a treatment for the coronavirus. However, some doctors who have prescribed it for their patients said it is very effective, but only when taken in conjunction with zinc.

Around the nation

  • West Virginia: The state says it has now tested 91,000 people for the coronavirus. So far, only 1,935 have tested positive, which is a rate of around 2 percent.

  • Arkansas: After reopening most businesses, Arkansas has seen a spike in new cases of the coronavirus. The state recorded 261 new cases Thursday, the largest single-day total so far.

  • Michigan: Businesses closed during the coronavirus lockdown have begun to reopen after nearly three months of inactivity and no revenue. Shopping malls are being allowed to reopen, but customers must make appointments to shop and maintain social distancing.

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