WASHINGTON, Feb. 17 (Xinhua) — U.S. retail sales surged in January, driven by stimulus payments that many households received in the recent COVID-19 relief package, the U.S. Commerce Department reported Wednesday.
Retail sales rose by 5.3 percent from the previous month to 568.2 billion U.S. dollars in January, the biggest gain in seven months and reversing three months of declines, according to the department.
“Stimulus checks from the December COVID-relief bill hit in early January and appear to have burned a hole in consumers’ pockets,” Tim Quinlan and Shannon Seery, economists at Wells Fargo Securities, wrote Wednesday in an analysis.
“Every single store type posted gains in January, with most retailers seeing the largest gain in sales since the summer,” they noted, expecting consumer spending to continue its recovery this year.
However, a deep freeze and widespread power outages are likely to put a damper on retail sales for February, according to Diane Swonk, chief economist at Grant Thornton, a major accounting firm.
“The losses could be more than we would typically expect, given where the temperatures plunged – in parts of the South and West – and the inability to shift online spending as millions were left without power,” Swonk wrote Wednesday in a blog post.
Swonk also believed that the gains in retail sales could undermine current negotiations for stimulus being pushed by the current administration. “Look for debate to intensify on better targeting aid to those who need it most,” she wrote.
The administration of President Joe Biden has recently stepped up efforts to push Congress to approve a 1.9-trillion-dollar COVID-19 relief package, including direct payments of up to 1,400 dollars for most individuals, which draws opposition from a growing number of congressional Republicans. Enditem