Most economists were expecting a rise of just over 1 percent.
With many shoppers armed with $600 checks, electronics and appliances saw the largest increase, up 14.7 percent for the month, while furniture and home furnishing stores were up 12 percent, and online spending at non-store retailers rose 11 percent. Even restaurants and bars, which have suffered terribly during the pandemic, witnessed a 6.9 percent spike.
Since January 2020, online shopping was the biggest winner with 28.7 percent, while building materials rose 19 percent, and sporting goods 22.5 percent.
“American shoppers blew the doors off retailers in January,” said Sal Guatieri, an economist at BMO Capital Markets, in a note to investors.
“Many households treated themselves after a less-than-merry holiday season.”
The report comes as congressional Democrats move forward with passing another round of emergency aid for families still reeling from the ongoing pandemic. The proposal is expected to include a third cash payment worth up to $1,400 for families earning less than $100,000.
New research from Morning Consult has also found that the highly anticipated $1,400 stimulus payments would help tens of millions of Americans pay off their bills.
Tapping into its household survey data, it estimated that more than thirty million adults were unable to pay their bills last month. The vast majority of them were households with incomes of $50,000 or less a year.
“A $1,400 check would allow 22.6 million adults to pay their expenses for at least four and a half months without incurring additional debt or eating further into their depleted savings, assuming that they maintain income from work and unemployment benefits,” the report said.
“If the checks are sent on March 1, these payments would allow 22.6 million Americans to pay their bills in full through the middle of July.”
However, another recent study has suggested that not giving out any sort of payment to households making more than $75,000 a year would be the most economically prudent.
The analysis, conducted by Opportunity Insights, showed that families earning under about $75,000 generally spend the money quickly. But for households earning more than $78,000 (and singles earning more than $50,000), they are likely to spend just $45 of a $600 stimulus check over the first month.
Scaled up to $1,400 payments, that would mean only $105 would be spent.
“Targeting the next round of stimulus payments toward lower-income households would save substantial resources that could be used to support other programs, with minimal impact on economic activity,” the study’s authors wrote.
Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.