US merchants celebrate as Biden's $1.9 trillion pandemic relief plan passes Senate scrutiny
The U.S. Senate passed a historic $1.9 trillion pandemic relief package in early 2021, known as the American Rescue Plan Act (ARPA). This comprehensive stimulus package was designed to support various sectors, including retail and small businesses.
Sen. Ben Cardin (D-Maryland) made a statement about the small business aid, highlighting the package's inclusion of $50 billion in aid to small businesses. This funding was aimed at economic recovery and business support, such as Paycheck Protection Program (PPP) loans and grants, designed to help small businesses retain employees and cover operational costs amid the pandemic disruptions.
The swift development and deployment of vaccines is adding to the momentum already building in retail. The improving public health picture and the promise of further fiscal relief is providing an optimistic outlook for the economy over the next two years, according to Wells Fargo economists.
RILA Senior Vice President, Government Affairs Austen Jensen hailed the provision, while National Retail Federation CEO Matthew Shay stated that ensuring quick and safe vaccination of the American people is the most critical component of the legislation passed by the Senate. The retail industry has been providing vaccines to employees and consumers in communities they serve across the country.
The retail sector has also been benefiting from the stimulus effect following the two COVID-19 relief bills passed during the previous administration, which helped spur consumer spending during the summer and early this year. Traffic to apparel and luxury retailers has improved in recent weeks, according to a client note from Morgan Stanley.
The economy added 379,000 jobs last month, pushing the unemployment rate down to 6.2% from January's 6.3%. While nearly half of small retailers are struggling to pay rent in March, according to research from small business platform Alignable, the relief package's provisions are expected to alleviate some of these pressures.
The ARPA also includes anti-poverty measures, direct relief of $1,400 per person to 85% of consumers, unemployment support, and investments for vaccine manufacturing and distribution. The package temporarily boosted SNAP benefits to support households in need, critical for sustaining consumer demand including retail grocery sectors.
The IRS and tax enforcement received funding to support administration of these relief efforts, including distribution of stimulus payments and tax credits that helped maintain household incomes and by extension retail sales during the economic crisis.
In summary, the 2021 COVID-19 relief package was comprehensive, with significant allocations to education, direct individual support, and business relief including small businesses, underpinning recovery efforts critical to retail and the broader economy in the United States. The twin good news of falling hospitalizations and deaths due to the pandemic plus the government's support to consumers is benefiting retailers of all sizes and types.
[1] Source: Wells Fargo Economics Group Research Note [2] Source: National Retail Federation Press Release [3] Source: CNN Business [4] Source: Wells Fargo Economics Group Research Note [5] Source: Internal Revenue Service
- The American Rescue Plan Act (ARPA), a $1.9 trillion pandemic relief package passed by the U.S. Senate in early 2021, includes $50 billion in aid for small businesses, as Sen. Ben Cardin (D-Maryland) stated.
- This funding is intended for economic recovery and business support, encompassing Paycheck Protection Program (PPP) loans and grants, to help small businesses retain employees and cover operational costs during the pandemic disruptions.
- The swift development and deployment of vaccines are boosting retail, with the retail industry providing vaccines to employees and shoppers in communities they serve.
- Wells Fargo economists predict an optimistic outlook for the economy over the next two years due to improving public health and fiscal relief.
- The retail sector has benefited from the stimulus effect of the two COVID-19 relief bills passed during the previous administration, encouraging consumer spending during summer and early 2021.
- Traffic to apparel and luxury retailers has shown considerable improvement recently, according to a Morgan Stanley client note.
- The ARPA comprises anti-poverty measures, such as $1,400 per person direct relief to 85% of consumers, unemployment support, and investments for vaccine manufacturing and distribution.
- The package temporarily boosted SNAP benefits to sustain consumer demand, particularly for the retail grocery sectors.
- The IRS and tax enforcement received funding to administer relief efforts, including stimulus payments and tax credits, vital for maintaining household incomes and retail sales during the economic crisis.
