US retail sales surge 5.3% in January, boosted by $600 stimulus checks
Shoppers were buoyed by the $600 payments they received at the beginning of 2021
U.S. retail sales soared in January as consumers, buoyed by the cash payments that many Americans received as part of the latest $900 billion coronavirus relief package, boosted their spending.
The value of total sales increased 5.3% from the prior month, the Commerce Department said Wednesday. Economists surveyed by Refinitv expected sales to climb 1.1%.
It comes after a decline of 1% in December, revised Commerce Department figures show.
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Spending was spread across industries last month, with receipts at bars and restaurants -- one of the sectors hit hardest by the pandemic -- increasing 6.9%. The biggest increase in sales was at department stores, up 23.5%, electronics and appliance stores, which rose 14.7%, and furniture stores, up 12%.
The report comes as congressional Democrats move forward with passing another round of emergency aid for families still reeling from the pandemic. The proposal, called the American Rescue Plan, is widely expected to include a third cash payment worth up to $1,400 for families earning less than $100,000.
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"The January data suggest that the picture is improving," said Cailin Birch, global economist at The Economist Intelligence Unit. "The stopgap aid bill that was passed by Congress in the final days of 2020, together with the likelihood of a sizeable economic relief package from the Biden administration before end-March, are likely to be feeding into household confidence, supporting spending."