Economic challenges 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 (NRF) chief economist Jack Kleinhenz, who recently said the new aid is particularly important to low-income families and the unemployed.
“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,” Kleinhenz said.Economic challenges brought on by the pandemic will continue in 2021, but stimulus legislation signed into law just after Christmas will help maintain and accelerate the ongoing recovery, according to National Retail Federation chief economist Jack Kleinhenz, who recently said the new aid is particularly important to low-income families and the unemployed.#
“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,” he said.
Legislation signed December 27 will provide one-time $600 stimulus checks to individuals making up to $75,000 a year and extends $300 weekly cheques for the unemployed for almost three months.
Kleinhenz’s remarks came in the January issue of NRF’s Monthly Economic Review, which said economic activity will likely pick up after the winter months and into mid-year as COVID-19 vaccines allow more activities to resume.
Retail sales for the first 11 months of 2020 (excluding automobile dealers, gasoline stations and restaurants) were up 6.6 per cent over the same period in 2019 and November’s year-over-year increase of 8.8 per cent put the holiday season on track to meet NRF’s forecast of between 3.6 per cent and 5.2 per cent growth, the report said.
Results for the full holiday season will be known when the Census Bureau releases December’s numbers on January 15, NRF said in a press release.
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 report said.
Rising wealth from increasing home values and stock prices have supported additional consumer purchases of retail goods, and the new stimulus checks should encourage consumers to ‘reengage’ on non-durable goods and services.
Fibre2Fashion News Desk (DS)
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