Business & Investment

Checks on stimulus measures are expected to increase consumer spending in January

On December 3, 2020, a woman carries a Nike shopping bag at the Citadel Outlet Mall as the global outbreak of coronavirus disease (COVID-19) continues in Commerce, California.

Lucy Nicholson | Reuters

With the support of the government’s stimulus package, consumers are expected to boost spending in January, and this trend could continue to gain momentum as the economy resumes.

According to Dow Jones, economists expect retail sales to increase 1.2% after a surprising decrease of 0.7% in December. The January Retail Sales Report will be released Wednesday at 8:30 EST. Excluding vehicles, sales are expected to increase by 1%.

“I think the main explanation is that things have improved,” said Stephen Stanley, chief economist at Amherst Pierpont. “November and December were pretty negative. People were getting depressed more and more as the virus gained momentum. In January you solved it a bit.”

As part of the last, Stanley said spending was likely boosted by a $ 600 stimulus check sent to individuals in early January. Covid Relief The bill was passed by Congress in late December. He expects sales to grow 0.8%, but that growth could be even greater in the coming months.

“It shows that $ 900 billion in financial bailouts have been brought to the economy,” said Mark Zandi, chief economist at Moody’s Analytics. “Overall, it’s very powerful. Most were retailers related to working from home. Electronics stores, consumer electronics stores, and online are good examples. But in January it was all of the above. Reopened retailers. Also showed strength .. Clothing stores and restaurants bounced back. “

Zandi said he expects total retail sales to increase by 2.1%, based on business-to-business data provided by software company Cortera, which tracks small business transactions.

“Cortera’s numbers are clearly strong. Unless the pandemic goes wrong, I think we’re running off,” he said. “The economy will be booming.”

According to Cortera, retailers’ spending on non-payments increased by 16.7%. According to Cortera, this level is 5% above the December level, suggesting that retail sales will also increase.

Economists also saw other signs that spending picked up.

“Credit and debit card data suggest that retail sales were pretty strong,” said Dian Wonck, chief economist at Grantsonton. “We have also relaxed some mitigations that should be useful as well, and all of these have come before the catastrophic cold that slows things down.”

Squonk said stimulus checks are important. “I think we’re really heading for a double dip. There was a pretty dramatic slowdown towards the end of the year,” she said.

The Biden administration has proposed another $ 1,400 stimulus check that is passing parliament. It should also increase consumer spending capacity.

“People are vaccinated. That would be another explosion of activity,” said Stanley, an economist at Amherst Peerpoint. “Basically, I think we’ll see improvements from now until the middle of the year. I think we’ll start full-scale opening in March.”

Checks on stimulus measures are expected to increase consumer spending in January

https://www.cnbc.com/2021/02/16/consumer-are-expected-to-have-spent-a-lot-more-in-january-helped-by-stimulus-checks.html Checks on stimulus measures are expected to increase consumer spending in January

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