Stimulus legislation signed into law just after Christmas will help maintain and accelerate the nation’s ongoing recovery from the impact of the COVID-19 pandemic, National Retail Federation Chief Economist Jack Kleinhenz said today.
Even though full recovery has yet to come, the economy has made considerable progress. In the January issue of NRF’s Monthly Economic Review, the report noted that 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.
Some of the money normally spent on traveling, dining out and entertainment shifted from services to goods in 2020, especially big-ticket home-related items like appliances and furniture, the NRF report said.
“As we closed out 2020, it was an end to a whirlwind year whose challenging economic environment will almost certainly continue in 2021,” Kleinhenz said in the January report. “The coming year might be just as eventful as the economic recovery faces many uncertainties.”
He added, “We expect retail sales spending to see a boost from the new round of stimulus. 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.”
Legislation signed Dec. 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 NRF report predicted that economic activity will likely pick up after the winter months and into mid-year as COVID-19 vaccines allow more activities to resume.
While consumer spending and retail sales have largely returned, results have varied among retail sectors and “economic uncertainty is very prevalent and at near-record levels,” the report said. Overall economic activity is not expected to return to pre-pandemic levels until late 2021 and employment at pre-pandemic levels is unlikely to return until well into 2022 or possibly 2023.