There is no pent-up demand

A story on Marketplace yesterday on euphoric shoppers on a spree after getting vaccinated suggests that there is pent-up demand that will explode once the enforced isolation of COVID-tide ends. There’s some anecdata in the piece, so I’ll offer some more. I was vaccinated yesterday, the first jab of two, and bought something afterward: breakfast.

“We’ve saved a lot of money during the pandemic and haven’t been able to do much,” said Cynthia Jones, who lives in Georgia. But her 25th wedding anniversary is coming up, so she and her husband booked a trip to Florida in December. “We’re gonna stay at a nicer hotel than we usually do,” Jones said. It’s the Hilton Bentley — right on the waterfront in Miami Beach. Then they’re going to fly across the state to Clearwater “and do as much as we can, now that we’re all vaccinated,” she said. Are you noticing a trend here in how people are spending — on makeup, restaurants, vacations? It’s on stuff they mostly haven’t done for a year.  

How people shop after getting vaccinated,” Marketplace, April 1, 2021

Let me offer a contrary opinion. There is no pent-up demand for anything except more money–and hasn’t been since 2008.

People have been spending this whole time. They’ve been buying online and having goods delivered. They’ve been reading Table for Two in The New Yorker and ordering fantastically delicious take-out. They’ve been having keggers with their frat buddies. They’ve been following the party circuit because you only live once. They’ve been paying down their debt.

If they have money.

If they have work.

Certain segments of the economy might see an increase in demand as spending shifts from Netflix-and-Chill to American Tourister, but overall? Nearly everyone was over-extended before. I doubt most people suddenly consolidated their positions and are now showing positive cash to debt ratios. I suspect–I hope–they’ve taken the chance to rethink their spending practices and are looking for ways to continue to redress the imbalance in their savings.

Except Mrs. Jones. She’s gonna spend like there’s no tomorrow.