Covid-19 Stimulus, Vaccinations Likely Spurred March Retail Sales Surge
By Amara Omeokwe
U.S. shoppers likely boosted retail spending sharply in March as
federal-stimulus funds made their way to households, warmer weather
set in and the economy reopened more fully from pandemic-related
Economists forecast that the Commerce Department will report
Thursday that retail sales -- a measure of purchases at stores, at
restaurants and online -- increased by 6.1% last month, compared
with a 3% drop in February.
"There were a lot of positive forces for consumers in March,"
said Michelle Meyer, head of U.S. economics at Bank of America.
"The reopening progressed throughout March, with more and more
states easing restrictions, more and more people becoming
vaccinated and feeling comfortable re-engaging in the economy and
activities that they did previously."
Economists said retail sales last month also likely moved higher
as they came off weakness in February, when sales were damped by
severe winter storms. The economists expect robust gains for autos
because of strong consumer demand for vehicles and higher gasoline
sales as prices at the pump rose last month.
Separate economic readings due Thursday are expected to show an
increase in March industrial production and a decrease in the
number of workers filing for unemployment benefits. U.S. consumer
confidence is at its highest levels since the Covid-19 pandemic
began, as signs of momentum in the economic recovery build. U.S.
employers, for example, added a seasonally adjusted 916,000 jobs in
March as the unemployment rate fell to 6%.
More Americans are also receiving the coronavirus vaccine, while
a pause this week in the use of the Johnson & Johnson shot is
expected to have a limited impact.
An average of roughly 2.9 million vaccine doses were
administered daily across the U.S. in the seven days ended April 9,
compared with about two million at the beginning of March,
according to data from the Centers for Disease Control and
Meanwhile, the federal government has since mid-March disbursed
about 159 million stimulus payments of more than $376 billion to
households from the latest virus-aid package, the Treasury
Department said this week.
While the economy in March still had 8.4 million fewer jobs than
just before the pandemic hit, the government aid has boosted
consumers' ability to spend, said Richard Moody, chief economist at
Regions Financial Corp.
"The story is that there's a lot of financial support in the
household sector, even though the level of employment is still so
far below where it was prior to the pandemic," Mr. Moody said.
Bank of America data tracking credit- and debit-card spending
showed consumers in March sharply increased spending on clothing
and furniture and at department stores and restaurants.
Similarly, figures from Earnest Research, a data analytics
company that tracks card spending, showed that consumer spending
was up 29% in March compared with February and up 24% last month
compared with the same period last year.
With increased vaccine circulation and Covid-19 cases retreating
from recent peaks at the end of 2020 and into early 2021, many
states have eased restrictions on businesses by, for example,
reversing bans or loosening limits on indoor dining.
Scott Allen Frost, president of Las Vegas-based Titan Brands
Hospitality Group, said the rollout of stimulus funds to households
last month coincided with a relaxing of state mandates that allowed
restaurants, including the three he oversees, to operate at
"You couldn't have timed March better," Mr. Frost said. "All
this pent-up demand came roaring back."
He said sales more than doubled last month compared with March
2019 at Slice of Vegas Pizza Kitchen & Bar and at Titan Brands'
two other restaurants, which serve Mexican fare.
Economists broadly expect consumer spending, which accounts for
roughly two-thirds of U.S. economic output, will help propel U.S.
economic growth this year at its best rate in decades.
Economists surveyed by The Wall Street Journal in April on
average forecast U.S. economic output will grow 6.4% in 2021, up
from an average forecast of 5.95% expansion in March.
Still, concerns over the pandemic's trajectory remain, with U.S.
cases edging up recently and vaccination efforts complicated by
reports of rare but severe blood clots among a few recipients of
the Johnson & Johnson vaccine. Federal Reserve officials and
many economists have said any sustained resurgence in cases could
threaten the economic recovery.
Mr. Frost, of Titan Brands Hospitality Group, said he had a
cautiously optimistic outlook for the months ahead. He is worried
that business could be constrained by factors such as rising prices
and the difficulty he has encountered recently trying to hire new
Write to Amara Omeokwe at firstname.lastname@example.org
(END) Dow Jones Newswires
April 15, 2021 05:44 ET (09:44 GMT)
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