Strong retail sales over the past few months have proven how resilient American consumers have been during the COVID-19 pandemic. However, the growing number of COVID-19 cases across the nation remain a threat, and additional federal stimulus could help the economy from derailing, according to National Retail Federation Chief Economist Jack Kleinhenz.,
“Strong growth in retail sales during the last few months points to the resiliency of consumers even in this disruptive pandemic environment,” Kleinhenz said. “Taking in all the evidence available, the U.S. economic recovery has progressed more quickly than generally expected.”
Kleinhenz’s remarks came in the November issue of NRF’s Monthly Economic Review, which noted that retail sales have been up both month-over-month and year-over-year each month since June. Retail sales have completed a V-shaped recovery and are up 8.6% since January, according to Harvard University’s Opportunity Insights research project.
Kleinhenz agreed with Federal Reserve Chairman Jerome Powell’s recent call for additional federal stimulus, which the chairman said “will not go to waste” even if it is more than necessary.
“While there might be sufficient momentum and resiliency to propel the economy in the months ahead, additional fiscal policy support is critical to ensure that the recovery doesn’t stall,” Kleinhenz said.
Consumer spending was down 16.1% in April 2020, according to the U.S. Commerce Department. But it rebounded strongly and was down only 1.9% as of August.
Americans have more disposal personal income, up 5.4% year-over-year as of August. The savings rate of 14.4% has remained in double digits for six straight months.
Even though government stimulus has tapered off, “savings are available if consumers decide to spend more aggressively,” Kleinhenz said, adding that consumer confidence remains below pre-pandemic levels but is rising.
Consumers surveyed for NRF plan to spend an average $997.79 on holiday spending, down about $50 from last year as they focus more on gifts for others rather than purchases for themselves.
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