‘Stagflation’, more Memorial Day travel expected despite gas prices, and more COVID news | National News
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Here’s a look at today’s COVID news for May 26.
More Memorial Day travel expected, despite high gas prices
To drive, or not to drive? This Memorial Day weekend, with surging gas prices that are redefining pain at the pump, that is the question for many Americans as a new COVID-19 surge also spreads across the country.
For Marvin Harper, of Phoenix, his family’s weekend travel plans are a double punch to the wallet. His college-age son and daughter each have a soccer tournament in Southern California and Colorado, respectively. He and his daughter will fly to Denver, rather than drive, because of the cost of fuel, while his wife and son will go to California in her SUV.
Worry about stagflation: a flashback to ’70s
Stagflation. It was the dreaded “S word” of the 1970s.
For Americans of a certain age, it conjures memories of painfully long lines at gas stations, shuttered factories and President Gerald Ford’s much-ridiculed “Whip Inflation Now” buttons.
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Stagflation is the bitterest of economic pills: High inflation mixes with a weak job market to cause a toxic brew that punishes consumers and befuddles economists.
For decades, most economists didn’t think such a nasty concoction was even possible. They’d long assumed that inflation would run high only when the economy was strong and unemployment low.
US making COVID antiviral drug more available at test sites
The White House on Thursday announced more steps to make the antiviral treatment Paxlovid more accessible across the U.S. as it projects COVID-19 infections will continue to spread over the summer travel season.
The nation’s first federally backed test-to-treat site is opening Thursday in Rhode Island, providing patients with immediate access to the drug once they test positive. More federally supported sites are set to open in the coming weeks in Massachusetts and New York City, both hit by a marked rise in infections.
Next week, the U.S. will send authorized federal prescribers to several Minnesota-run testing sites, turning them into test-to-treat locations.
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Get more of the latest COVID news here:
States with the largest drop in services spending during COVID-19
States With the Largest Drop in Services Spending During COVID-19
Photo Credit: David Tadevosian / Shutterstock
One of the factors contributing to inflation in the price of goods is lower spending in services during the pandemic. Service-based industries like transportation, lodging, restaurants, and entertainment venues have seen weakened demand due to consumer concerns about exposure to COVID-19. Dollars that might have gone toward services have increasingly flowed toward durable goods instead. For example, many households sought out substitutes when services were restricted, like home exercise equipment for fitness or consumer electronics for entertainment. Others took rising wages and money saved from forgoing trips, performances, and restaurant meals and used it for big-ticket purchases like cars, furniture, and technology.
Data from the U.S. Bureau of Economic Analysis shows how spending between goods and services has differed during the pandemic. Both categories saw sharp declines in spending in the wake of COVID-19 shutdowns in March and April 2020. But while both categories have since bounced back over time, the growth in spending on durable goods has increased at a much faster rate. Spending on durable goods is now 32.7% higher than it was at the beginning of 2019, while spending on services is up only 7.7% over the same span.
Consumer spending on durable goods has rapidly increased since COVID
The divergence between increased spending on durable goods and decreased spending on services in 2020 was apparent nationwide, but the magnitude of these trends varied by state. States with lower drops in spending on services included Mountain West locations like Idaho, Montana, and Arizona, where COVID outbreaks did not appear until later than many parts of the country and residents may have been more inclined to spend as usual.
In contrast, states with the biggest drop in services spending included remote states like Alaska and Hawaii, where residents spend large amounts to travel in normal years were unable to during COVID. Other states like New York, Massachusetts, and California also saw large drops due to significant COVID outbreaks and stringent public health restrictions affecting businesses like restaurants and entertainment venues.
Services and durable goods spending by state
The data used in this analysis is from the U.S. Bureau of Economic Analysis. To determine the states with the largest drop in services spending during COVID-19, researchers at Smartest Dollar calculated the percentage change in household consumption expenditures for services from 2019 to 2020. In the event of a tie, the state with the greater total decrease in services spending was ranked higher. Services spending includes health care services, recreation services, food services, accommodations, financial services, and insurance, among others. Durable goods spending includes things like appliances, home furnishings, outdoor equipment, electronics, sporting goods, and vehicles.
Here are the states with the largest drop in services spending during COVID.
15. Georgia
Photo Credit: Luciano Mortula – LGM / Shutterstock
- Percentage change in services spending (2019-2020): -6.8%
- Total change in services spending (2019-2020): -$18,509,200,000
- Percent change in durable goods spending (2019-2020): +9.6%
- Total change in durable goods spending (2019-2020): +$4,396,000,000
- Per capita services spending (2020): $23,701
- Per capita durable goods spending (2020): $4,687
14. Washington
Photo Credit: f11photo / Shutterstock
- Percentage change in services spending (2019-2020): -7.1%
- Total change in services spending (2019-2020): -$17,388,600,000
- Percent change in durable goods spending (2019-2020): +8.6%
- Total change in durable goods spending (2019-2020): +$3,358,900,000
- Per capita services spending (2020): $29,678
- Per capita durable goods spending (2020): $5,504
13. Rhode Island
Photo Credit: Richard Cavalleri / Shutterstock
- Percentage change in services spending (2019-2020): -7.5%
- Total change in services spending (2019-2020): -$2,361,000,000
- Percent change in durable goods spending (2019-2020): +4.5%
- Total change in durable goods spending (2019-2020): +$191,200,000
- Per capita services spending (2020): $27,388
- Per capita durable goods spending (2020): $4,240
12. Virginia
Photo Credit: Sean Pavone / Shutterstock
- Percentage change in services spending (2019-2020): -7.6%
- Total change in services spending (2019-2020): -$19,051,300,000
- Percent change in durable goods spending (2019-2020): +8.0%
- Total change in durable goods spending (2019-2020): +$3,233,600,000
- Per capita services spending (2020): $26,939
- Per capita durable goods spending (2020): $5,097
11. North Dakota
Photo Credit: Jacob Boomsma / Shutterstock
- Percentage change in services spending (2019-2020): -7.8%
- Total change in services spending (2019-2020): -$1,774,300,000
- Percent change in durable goods spending (2019-2020): +8.9%
- Total change in durable goods spending (2019-2020): +$359,600,000
- Per capita services spending (2020): $27,278
- Per capita durable goods spending (2020): $5,732
10. Pennsylvania
Photo Credit: Gang Liu / Shutterstock
- Percentage change in services spending (2019-2020): -7.8%
- Total change in services spending (2019-2020): -$30,522,900,000
- Percent change in durable goods spending (2019-2020): +4.7%
- Total change in durable goods spending (2019-2020): +$2,830,800,000
- Per capita services spending (2020): $28,142
- Per capita durable goods spending (2020): $4,887
9. Vermont
Photo Credit: Sean Pavone / Shutterstock
- Percentage change in services spending (2019-2020): -8.0%
- Total change in services spending (2019-2020): -$1,565,400,000
- Percent change in durable goods spending (2019-2020): +3.0%
- Total change in durable goods spending (2019-2020): +$90,000,000
- Per capita services spending (2020): $28,897
- Per capita durable goods spending (2020): $4,929
8. Minnesota
Photo Credit: Checubus / Shutterstock
- Percentage change in services spending (2019-2020): -8.3%
- Total change in services spending (2019-2020): -$14,401,900,000
- Percent change in durable goods spending (2019-2020): +5.4%
- Total change in durable goods spending (2019-2020): +$1,669,100,000
- Per capita services spending (2020): $28,245
- Per capita durable goods spending (2020): $5,772
7. California
Photo Credit: Eric Urquhart / Shutterstock
- Percentage change in services spending (2019-2020): -8.3%
- Total change in services spending (2019-2020): -$109,783,100,000
- Percent change in durable goods spending (2019-2020): +4.5%
- Total change in durable goods spending (2019-2020): +$8,007,500,000
- Per capita services spending (2020): $30,960
- Per capita durable goods spending (2020): $4,749
6. Maryland
Photo Credit: f11photo / Shutterstock
- Percentage change in services spending (2019-2020): -8.4%
- Total change in services spending (2019-2020): -$15,999,900,000
- Percent change in durable goods spending (2019-2020): +3.8%
- Total change in durable goods spending (2019-2020): +$1,041,200,000
- Per capita services spending (2020): $28,721
- Per capita durable goods spending (2020): $4,650
5. Massachusetts
Photo Credit: ESB Professional / Shutterstock
- Percentage change in services spending (2019-2020): -8.6%
- Total change in services spending (2019-2020): -$22,081,300,000
- Percent change in durable goods spending (2019-2020): +2.9%
- Total change in durable goods spending (2019-2020): +$1,022,300,000
- Per capita services spending (2020): $34,024
- Per capita durable goods spending (2020): $5,212
4. Illinois
Photo Credit: JoelC024 / Shutterstock
- Percentage change in services spending (2019-2020): -8.6%
- Total change in services spending (2019-2020): -$32,527,800,000
- Percent change in durable goods spending (2019-2020): +6.7%
- Total change in durable goods spending (2019-2020): +$3,870,300,000
- Per capita services spending (2020): $27,316
- Per capita durable goods spending (2020): $4,927
3. New York
Photo Credit: Lukas Uher / Shutterstock
- Percentage change in services spending (2019-2020): -9.3%
- Total change in services spending (2019-2020): -$64,227,600,000
- Percent change in durable goods spending (2019-2020): +1.9%
- Total change in durable goods spending (2019-2020): +$1,561,700,000
- Per capita services spending (2020): $32,338
- Per capita durable goods spending (2020): $4,354
2. Hawaii
Photo Credit: Izabela23 / Shutterstock
- Percentage change in services spending (2019-2020): -9.6%
- Total change in services spending (2019-2020): -$4,294,100,000
- Percent change in durable goods spending (2019-2020): +4.5%
- Total change in durable goods spending (2019-2020): +$238,400,000
- Per capita services spending (2020): $28,612
- Per capita durable goods spending (2020): $3,959
1. Alaska
Photo Credit: Jacob Boomsma / Shutterstock
- Percentage change in services spending (2019-2020): -10.1%
- Total change in services spending (2019-2020): -$2,579,000,000
- Percent change in durable goods spending (2019-2020): +9.1%
- Total change in durable goods spending (2019-2020): +$357,700,000
- Per capita services spending (2020): $31,450
- Per capita durable goods spending (2020): $5,879
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