Consumers Use $250 in Economic Recovery Payments

Wonder how consumers spend money it gets back from the government? The U.S. Department of Labor, Bureau of Labor Statistics keeps up with this kind of data and released the latest numbers in a report today.

In 2009, the Social Security Administration administered the delivery of one-time economic recovery payments of $250 for most recipients of Social Security, Railroad Retirement, Supplemental Security Income, and Veterans' Benefits. Individuals who qualified for or received any of these benefits anytime from November 2008 through January 2009 were eligible to receive this one-time economic recovery payment. The payments were sent by the Department of Treasury during May 2009.

Here's how the money was spent by race:

* For Whites, 41 percent reported using the payment mostly for spending, 26 percent mostly for saving, and 32 percent mostly for paying off debt.

* For Blacks, 34 percent reported mostly spending, 13 percent reported mostly saving, and 51 percent reported mostly paying off debt.

More information was gathered on Hispanic spending of Recovery payments.

* Hispanics (37 percent) were less likely than non-Hispanics (41 percent) to have reported mostly spending the payment. Hispanics (48 percent) were much more likely to use the payment mostly for paying off debt than they were to use it mostly for spending, and a smaller proportion (33 percent) of non-Hispanics used the payment to pay off debt. This meant that Hispanics were about half as likely (12 percent) as non-Hispanics (25 percent) to use the payment mostly for saving.

The report also gave information on how older Americans used Recovery money.

* Exactly half—50 percent—of recipients under age 62 used the payment to pay off debt. For those 62 or older, the proportion that used the payment for paying off debt ranged from one-fourth (25 percent) for those age 85 and older, to almost one-third (33 percent) for those age 66 to 74 years. Within those age ranges, about 32 percent for those age 62 to 65 and 28 percent for those age 75 to 84 used the payment to pay off debt.

* The percentage reporting saving the payment increased with age: Exactly 1 in 10 of the youngest group saved the payment, compared with almost 22 to 23 percent of those age 62 to 74, and 32 percent of those age 75 to 84, and 39 percent of those 85 and older.

* The oldest group was the least likely to spend the payment (33 percent), followed by recipients age 75 to 84 years and under age 62 (39 percent each). The other groups (62 to 65 and 66 to 74 years old) were similar to each other—43 to 44 percent reported mostly spending the payment.

* Small proportions of each age group either did not know or refused to report how they mostly used the payment (1 percent to 4 percent); the values for each group are included in the tables for reference, but because of the small amounts they are not discussed further in this report.