With federal stimulus money coming, what will this mean for Whatcom retailers?
With the new federal stimulus package finalized and vaccination numbers rising during the COVID-19 pandemic, Whatcom County retailers could see short- and long-term boosts in sales.
The stimulus package, signed by President Joe Biden on Thursday, March 11, includes a host of incentives that could lead to increased spending at local stores and restaurants. These new measures include $1,400 stimulus checks, $300-per-week increases in jobless aid and child tax credits.
For Whatcom County, Economist Hart Hodges doesn’t expect a sudden surge in spending in March, but it will spread over the coming months as people get more comfortable doing pre-pandemic things again. That includes more vacation travel by summer and more eating out as more people are vaccinated.
He added that the child tax credits is a new wrinkle that could really be a boost as those payments come in periodically in the coming months.
“It will be interesting to see how people respond to that type of stimulus,” said Hodges, co-director of Western Washington University’s Center for Economic and Business Research.
Nationally there’s some who expect much of the stimulus could go toward savings or paying off debts. A Bank of America study found that 73% of people who received the $600 stimulus check in February used it to pay off debts or put it in savings.
Hodges doesn’t think that will be the case locally with this round of stimulus.
“There are a lot of people who will spend the stimulus money because they have to. They don’t have the luxury of putting it into savings or the stock market,” Hodges said.
James McCafferty agreed with Hodges, adding this stimulus is more targeted to people who need this assistance.
“The stimulus is likely to have a much longer impact than what we have seen to date because of the complexity of what it will do,” said McCafferty, who also directs Western’s research center. “We expect a quick impact but then a prolonged impact on (gross domestic product) that will stretch out for several years as we return to the mean.”
Hodges also expects the retail growth to mostly happen in industries that suffered losses during the pandemic. There won’t be as much growth in things like home-office renovation, for example.
The most recent retail sales data from the Washington State Department of Revenue sheds some light on what Whatcom County industries were doing well and those that weren’t during the summer months of of 2020. According to the data:
▪ Local sales of building materials (up 23% year-over-year), electronics (up 23%) and cars (up 19%) were very strong last summer.
▪ Clothing stores (down 26% year-over-year), restaurants (down 24%) and big box stores (down 13%) were the industries that took the biggest hits in Whatcom County in terms of sales.
▪ Overall taxable retail sales for Whatcom County hit $1.3 billion in the third quarter, up slightly from the 2019 third-quarter total of $1.28 billion.
