The sudden economic shock from coronavirus stay-at-home orders caused a stunning drop in local commerce in cities across the country, with San Francisco seeing the heaviest decline, followed by Chicago, New York and Detroit.
How it works: The JP Morgan Chase Institute analyzed a subset of credit card transactions typical of everyday goods and services bought and sold at the local level to create a "local commerce" economic view.
What they found: Local commerce spend declines were fairly uniform across neighborhoods with a wide variation of household median income. The only two categories that showed growth overall were grocery stores and pharmacies, with online spend on groceries nearly doubling.
But in low-income neighborhoods, local commerce spend plummeted much further into negative territory.
- Lower-income neighborhoods saw a disproportionate share of severe spending declines over 15%, with 11.5% of neighborhoods in the lowest-income bracket experiencing severe spending declines.
- Consumers in low-income neighborhoods were less likely to order groceries online and more likely to travel farther to reach grocery stores, increasing time away from home and the risk of getting sick.
The bottom line: The data points to what we already know — that the pandemic and its economic shocks disproportionately hurt those who could least afford it.