A shortened week in the markets still brought with it some optimistic news regarding stimulus details and retail sales numbers. However, the major story of the week was the extensive damage caused by widespread winter storms throughout the country. The economic impact of these storms will be significant, but it pales in comparison to the human impact.
Stimulus News – New details emerging regarding the stimulus checks that would be a part of the new coronavirus relief bill. The legislation, which would involve $1,400 checks for each member of the household, is expected to be finalized by early to mid-March. Income thresholds are anticipated to be the same, but Democrats are proposing that the checks be based on either 2019 or 2020 tax returns. This would create an incentive to file 2020 taxes early, especially for those whose income dropped in 2020. The anticipated stimulus checks are projected to keep as many as 20 million Americans financially afloat through July. Additionally, the stimulus creates another opportunity to boost consumer spending and economic activity.
Retail Sales Numbers – January retail sales grew 5.3%, significantly exceeding projections of 1.2% growth. The growth in retail spending came as millions of consumers received their $600 stimulus checks that were part of the second COVID stimulus package. This aggressive increase in consumer spending bodes well for retailers, as millions of Americans will soon be armed with an additional $1,400 to put to work.
Winter Storms – Winter storms battered the United States from coast to coast, Texas being the hardest hit. It is estimated that these storms will cause between $45M and $50M in damages and economic loss. By comparison, the entire 2020 hurricane season caused approximately $60M in damages and loss. This unforeseen event added further instability to an economy that was already shaken by the coronavirus pandemic and work restrictions.
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