Today we’ll look at a couple of economic reports over the last week which suggest the economic recovery from the COVID-19 pandemic and recession earlier this year continues to improve. We’ll examine the latest stronger than expected retail sales report for January and the January rise in consumer confidence above expectations.
Following those discussions, we’ll look at the sharp rise in family relocations over the last few years. Specifically, we’ll examine the regions most Americans are leaving and the most popular places they are choosing to relocate. It should be an interesting discussion.
US retail sales jumped a surprising 5.3% (annual rate) in January, well above the pre-report consensus of just 1.2%. The big move came as millions of consumers received $600 stimulus checks late last year and were anxious to spend them following the coronavirus economic lockdowns of last year.
Every major category of spending, including food and drinking establishments, saw gains last month. A month after Congress approved a $900 billion additional stimulus package on top of the $2.2 trillion approved earlier in 2020 to counteract the COVID-19 impact, shoppers were armed with $600 checks they used to buy a variety of goods.
The jump in consumer spending came at a time when expectations for growth in the early part of 2021 were muted as the economy continued to shake off the pandemic-induced slowdown. Yet spending gains were broad-based, with every major category showing increases.
Electronics and appliances saw the biggest increase, up 14.7% for the month, while furniture and home furnishing stores were up 12% and online spending at non-store retailers jumped 11%. Even food and drinking places, which suffered the worst during the pandemic, saw a 6.9% rise.
Online shopping was the biggest gainer since January 2020, up 28.7%, while building materials rose 19% and sporting goods increased 22.5%. All in all, it was a great report and gets the New Year off to a strong start. Let’s hope it continues.
Next, the US Consumer Confidence Index also rose more than expected in January. US consumer confidence rose last month as Americans grew more upbeat about the outlook for the economy and job market in light of further fiscal aid and increased distribution of coronavirus vaccines.
The Conference Board’s Consumer Confidence Index increased to 89.3 from a revised 87.1 reading in December, according to the latest report. The median forecast among economists called for a reading of 89. The gauge of forward-looking expectations rose to a three-month high of 92.5.
The overall improvement in sentiment follows the recent passage of a $900 billion aid package and coincides with a proposed $1.9 trillion in additional stimulus which President Biden is pushing. While the confidence index remains well below pre-pandemic levels as the health crisis prompts tighter restrictions on activity, a more widespread rollout of the vaccine and additional financial assistance could shore up sentiment more in the months ahead.
Finally, in case you haven’t noticed, more families and individuals are relocating than ever before. Millions of Americans ended 2020 living at a different address than where they started the year. With 10 million still unemployed, families which never dreamed of moving are having to relocate to find jobs.
By October of last year, 8.93 million people had moved since the pandemic began in March, according to an analysis of United States Postal Service change of address requests by the National Association of Realtors (NAR). That’s an increase of nearly 94,000 from the same period the year before.
While we know why so many more Americans are relocating, the question is – where are they moving too… and from? Contracts from moving van companies Atlas Van Lines and U-Haul show that people who chose to move to a new state headed away from the population centers on the coasts, with New York and California losing the most residents in 2020.
Above all, the NAR’s latest relocation report found newly unemployed workers largely left big cities for the suburbs. This pattern is expected to continue well into 2021, according to the NAR. With more people deciding where they live based on their own personal needs instead of their commuting time to work, it could mean long-term growth for suburbs and smaller cities.
While New York and California lost the most resident to relocation, Idaho topped Atlas’ list for states with the most inbound moves. Also in the top 10 were North Carolina, Maine, Alabama and New Mexico.
Texas is also high on the list; we’re seeing over 100 people per day moving to Austin alone! It seems everyone wants to live in the Texas “Hill Country.” Fortunately, we live on some acreage on beautiful Lake Travis outside Austin, with no neighbors close to us. Unfortunately, this week’s historic ice/snow event meant we had to stay off the Hill Country roads and remain at home earlier this week.
Stay safe and warm, everyone!
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