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In the United States, COVID-19 cases and currency in circulation both surged in March 2020. Did consumer choice play a role in the increase in currency in circulation? With fewer opportunities to shop and pay in person, why would consumers hold more cash? Data from the fall 2019 Survey and Diary of Consumer Payment Choice and interim rapid-response surveys in spring and late summer 2020 give some insights into consumer cash holdings and payments behavior.

Key findings:

  1. U.S. consumers increased their cash holdings at the time of the pandemic lockdowns. More consumers held at least some cash, and almost half of consumers had more than $100 in spring and late summer 2020, compared to one-third in fall 2019.
  2. In spring, just one-third of consumers reported making an in-person payment, compared to almost everyone in fall 2019. People who paid in person, however, were about as likely to use cash in the spring as they had been in the previous fall.
  3. Payments of unemployment benefits appear to have affected cash holdings for some consumers.
  4. Similar to the behavior of some consumers in advance of hurricanes, some consumers reported getting precautionary amounts of cash.

Economic Survey Research Center and the Retail Payments Risk Forum

JEL classification: D9, D14, E42

Key words: COVID-19, cash, U.S. currency in circulation, consumer behavior


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