New Stimulus Checks Should Boost Retail Sales
NRF chief economist predicts another round of payments will seed momentum into 2021.
Jan 06, 2021 | 2 min read
WASHINGTON—Economic challenges for retailers brought on by the coronavirus pandemic will continue in 2021, but stimulus legislation signed into law just after Christmas will help maintain and accelerate the nation’s ongoing recovery, according to National Retail Federation Chief Economist Jack Kleinhenz.
“As we closed out 2020, it was an end to a whirlwind year whose challenging economic environment will almost certainly continue in 2021,” said Kleinhenz in a press release. “The coming year might be just as eventful as the economic recovery faces many uncertainties. Recoveries do not proceed in a straight line, and the prospects for volatility over the next few months are high. Nonetheless, just like the old Timex watch commercials, the economy takes a licking but keeps on ticking.”
Legislation signed December 27 will provide one-time $600 stimulus checks to individuals making up to $75,000 a year and extends $300 weekly checks for the unemployed for almost three months. The new aid is particularly important to low-income families and the unemployed, who have faced challenges paying day-to-day bills in recent months.
“We expect retail sales spending to see a boost from the new round of stimulus,” he said. “Consumers responded quickly to last spring’s stimulus checks, and distribution of the new checks will come at a critical time that will help carry 2020’s momentum into 2021.”
Even though full recovery has yet to come, the economy has made considerable progress. Retail sales for the first 11 months of 2020 (excluding automobile dealers, gasoline stations and restaurants) were up 6.6% over the same period in 2019, and November’s year-over-year increase of 8.8% put the holiday season on track to meet NRF’s forecast of between 3.6% and 5.2% growth.
Crisis management
