Checks a lifeline for some, cushion for others

Millions of Americans received government relief checks this week, and more are on the way. For some, the payment gets them to a more comfortable place financially; for others, the money just gets them to next month.

The coronavirus has ravaged the economy as limitations to stop its spread have shuttered many businesses. About 22 million Americans have applied for unemployment benefits in the past month alone.

The one-time relief payments will offset some of the economic shock of the health crisis, said Mark Zandi, chief economist at Moody’s Analytics. He expects the payments to boost U.S. gross domestic product — the broadest measure of economic output — by $293 billion, or about 1.4% of pre-crisis levels, mostly this spring and summer.

Zandi expects most people will spend the money on necessities such as rent and food.

The Treasury Department says about 80 million Americans received their payments as of Wednesday. Millions more have signed up to get direct deposit, and paper checks will be distributed starting later this month.

Eligible adults will see a payout up to $1,200 — married couples up to $2,400 — plus $500 per child. Eligibility is cut off at earnings of more than $99,000 for individuals and $198,000 for married couples.

The anxiety is just a small indicator of how financially stretched Americans were before the outbreak.

Experts generally suggest people have three to six months of savings set aside for emergencies, but few do. At least onequarter of American adults say they wouldn’t be able to cover an unexpected expense of $400, according to a survey done by the Federal Reserve before the pandemic.

Americans have also been taking on more debt in recent years amid confidence they would have the means to pay it off. U.S. consumer borrowing is at an all-time high of $4.2 trillion, according to the Fed.

That does not include home mortgages or other loans secured by real estate.