Retail sales in March 2021 explode as consumers use stimulus controls

A new batch of stimulus controls boosted consumer purchases in March as the U.S. economy continued to squeeze juice from Congress ’aggressive spending.

Retail sales rose 9.8% during the month, the Commerce Department said Thursday. This compared to the Dow Jones estimate of a 6.1% gain and a 2.7% drop in February.

Sporting goods, clothing and food and beverages led spending gains and contributed to the best month for retail since the 18.3% gain in May 2020, which came after the first round of controls of stimulus.

A separate report showed that the first unemployment insurance applications fell, and the Department of Labor reported 576,000 new unemployment claims for the week ended April 10th. decrease from the previous week’s total of 769,000.

The Dow Jones claims estimate was 710,000.

As the image of the jobs lit up, consumers did their $ 1,400 stimulus checks and spent aggressively. The money was generated by the U.S. $ 1.9 trillion rescue plan law that Congress passed in March.

The legislation adopted stimulus and rescue payments approved last year, since the Covid-19 pandemic began to be about $ 5 trillion, fueled by the red ink that tax authorities deem necessary to keep the economy afloat. operation.

The expense of the month was ample.

The critical bar and restaurant industry experienced a 13.4% increase, thanks to the growing relaxation of restrictions, as Covid vaccines are accelerating at a rate of more than 3 million a day.

Expenditure on sporting goods was the highest percentage of earnings, with 23.5%, followed by clothing and accessories with 18.3% and motor vehicle parts and dealers with 15.1%.

March’s retail report was another sign that consumers in general are staying healthy and willing to spend, although growing amounts of stimulus controls are heading toward savings and not toward expense.

“Expenditure will almost certainly be reduced in April as part of the stimulus is wasted, but with the deployment of vaccination at an accelerated pace and household finances in good shape, we expect consumption growth global continued to rebound rapidly also in the second quarter, “wrote Michael Pearce, senior economist at Capital Economics.

A recent report from the New York Federal Reserve indicated that stimulus recipients expect to save 41.6% of their checks and spend 24.7%. After the first round of checks in the spring of 2020, consumers saved 34.5% and spent 29.2%.

As the recovery has picked up speed, consumers have had to deal with the strongest signs so far of building inflationary pressures. The consumer price index rose 2.6% in March from last year, thanks in part to rising gasoline prices. The year-on-year gain was the largest since August 2018.

Thursday’s economic data also showed more signs of a thaw in the job market.

The fall in unemployment claims generated the lowest weekly number since March 14, 2020, just after the official declaration of a pandemic. Nearly two weeks later, weekly claims claims would exceed their staggering 6.15 million, the worst week in U.S. history.

Since then, the labor market has improved dramatically, with an unemployment rate falling from a pandemic peak of 14.7% to the current 6%. The sum of 916,000 non-farm payrolls in March gave more hope that healing would accelerate.

Despite the large drop in weekly claims, continued claims varied little, at 3.73 million.

The four-week moving average of weekly claims dropped to 683,000, also the lowest since March 14th.

The total beneficiaries of all government programs fell by more than 1.2 million to 16.9 million during the week ended March 27th. This decline occurred mainly due to the fall of those presenting programs related to the pandemic.