Consumers are back to buying. Or at least that’s what the latest U.S. Commerce Department’s retail sales data suggests. Retailers apparently got a boost from recent stimulus payments in January, after stores and restaurants saw monthly declines during Q4 2020.
Not surprisingly, home furnishings and electronics were the leading gainers, given many households are still not venturing out widely yet. However, some good news appeared for restaurants that had a 6% monthly sales increase. More states are lifting indoor dining and capacity restrictions, which is exactly what the hospitality sector needs to get back on its feet.
The following excerpt from a Wall St. Journal article reports more on the topic:
U.S. shoppers sharply increased spending in January, buoyed by stimulus payments that many households received in the most recent virus-relief package.
Retail sales, a measure of purchases at stores, at restaurants and online, rose by a seasonally adjusted 5.3% in January from a month earlier, the Commerce Department said Wednesday. The increase followed three months of decline during the holiday season. It was the strongest gain since last June, when the economy was in the process of reopening from pandemic-related closures.
Spending rose across the board, including in categories hit hard by social distancing and pandemic-related restrictions, such as bars and restaurants.
The latest stimulus checks were part of the $900 billion aid package former President Donald Trump signed into law Dec. 27, which expanded the amount and duration of unemployment benefits available to millions of laid-off workers. Employers also resumed hiring in January, during which the unemployment rate declined to 6.3% from 6.7%. Lawmakers are currently debating a further coronavirus-relief program that would potentially include $1,400-a-person payments to most households.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group