Retail sales for the US in March increased exponentially likely due to the fact that a fresh batch of stimulus checks were recently sent out to citizens. This is great news for the retail sector of the economy, which has been struggling greatly throughout the past year.
The US Commerce Department reported that advance retail sales rose by 9.8% in March; the Dow Jones estimated a gain of 6.1% and a decline of 2.7% back in February. “Sporting goods, clothing and food and beverage led the gains in spending and contributed to the best month for retail since the May 2020 gain of 18.3%, which came after the first round of stimulus checks,” according to CNBC.
The Labor Department also reported that “first-time filings for unemployment insurance plunged, with 576,000 new jobless claims for the week ended April 10. That was easily the lowest total since the early days of the Covid-19 pandemic and represented a sharp decline from the previous week’s total of 769,000. The Dow Jones claims estimate was 710,000.”
As jobless claims began to decrease and stimulus checks continued to be mailed out, the retail industry saw a massive rise in spending. Sales were boosted by 28% when compared to what the industry looked like at this point last year during the beginning of the pandemic.
The bar and restaurant industry saw a 13.4% increase as well thanks to the rollout of multiple vaccines and the relaxing of Covid-19 restrictions. Currently the US is vaccinating more than 3 million people every day.
Sporting goods saw the highest rise in spending last month, likely due to the fact that summer is approaching and more Americans realize they’ll be vaccinated an able to participate in more outdoor activities this year. That sector saw a 23.5% increase followed by clothing and accessories which saw a 18.3% increase.
“Spending will almost certainly drop back in April as some of the stimulus boost wears off, but with the vaccination rollout proceeding at a rapid pace and households finances in strong shape, we expect overall consumption growth to continue rebounding rapidly in the second quarter too,” wrote Michael Pearce, senior U.S. economist at Capital Economics.
The New York Federal Reserve released a report recently that indicated “stimulus recipients expect to save 41.6% of their checks and spend 24.7%. Following the first round of checks in the spring of 2020, consumers saved 34.5% and spent 29.2%. The consumer price index rose 2.6% in March from a year ago, thanks in part to a surge in gasoline prices. The year-over-year gain was the largest since August 2018.”
The past four weeks have shown a weekly average of 683,000 jobless claims, which is the lowest it’s been in quite some time. With this hopeful decrease in weekly claims, it’s likely that America’s economy overall will begin to see an increase in spending.
Eric Mastrota is a Contributing Editor at The National Digest based in New York. A graduate of SUNY New Paltz, he reports on world news, culture, and lifestyle. You can reach him at email@example.com.