Does Spending Slide When COVID-19 Surges?

In his press conference after the July 2021 Federal Open Market Committee meeting, Federal Reserve Chair Jerome Powell stated that “[W]ith successive waves of COVID...there has tended to be...less in the way of economic implications from each wave. And we will see whether that is the case with the delta variety” (Board of Governors of the Federal Reserve System, 2021). In this District Data Brief, we show that state-level data suggest that, indeed, economic implications from the latest wave have been less than those from the fall 2020 wave. While there has been some consumer response to the delta-variant-driven COVID-19 surge, it has been weaker than the response to the fall 2020 COVID-19 surge.