Important data on the U.S. retail sales economy showed a sharp recovery in January driven by additional Covid-19 stimulus assistance from the government. This also gives an indication that economic activity is on the rise after the restriction measures imposed last December.
Retail sales increased by 5.3% last month based on figures released by the Commerce Department just now. The December data revised showed a decrease of 1.0% compared to the previous reading of 0.7%. This January reading far surpasses economists' forecasts targeting a 1.1% increase.
Core retail sales also recorded an increase of 6.0% last month. The U.S. government approved a nearly $ 900 billion Covid-19 stimulus package by the end of December, which included a $ 600 check to most low-income Americans and some middle-income people.
The package also provides weekly government-funded unemployment subsidies as well as benefits for millions of people who do not meet the state unemployment program requirements.
Economists are targeting this trend to continue for months to come. U.S. Congress is considering President Joe Biden's $ 1.9 trillion recovery plan, which would include an additional $ 1,400 checks to households.
The economy is forecast to grow by 4.8% this year after contracting 3.5% by 2020, the largest decline in gross GDP since 1946. The US dollar index strengthened by 0.58% to the 91.035 exchange rate.
