Retail sales in February dropped 3 percent from January, a sharper decline than expected, but reflecting the timing of stimulus payments.
Sales in January had surged 7.3 percent after $600 stimulus payments were deposited into consumers’ bank accounts at the end of last year. Spending then fell in February, but was $33 billion higher than in February 2020, the New York Times reported.
The stimulus checks arriving now — as much as $5,600 for joint-filer households earning under $150,000 — are expected to heighten spending. Furniture sellers, department stores and restaurants all saw January sales rise after the smaller stimulus, as did big-box retailers and grocery stores.
“Going forward, the new stimulus checks that are going out as we speak are definitely going to be a positive for retail sales in March and through April,” Mickey Chadha, a retail analyst at Moody’s Investors Service, told the Times. “All indications are, as the vaccines roll out through the country and the pandemic gets under control, this capacity to spend is only going to fuel further sales in retail.”
The new stimulus package, known as the American Rescue Plan, also extends $300 weekly federal jobless benefits through Sept. 6, which is expected to increase spending by beneficiaries.