Congressional approval grants Biden's $1.9 trillion pandemic relief package, eliciting cheers from retailers nationwide
The U.S. Senate's passage of the $1.9 trillion American Rescue Plan Act (ARPA) in March 2021 has brought a wave of relief and optimism to the retail sector and small businesses. According to Wells Fargo economists, this stimulus package is expected to boost the U.S. real GDP growth this year by 6.2%, marking the fastest recovery since the late 1950s.
The ARPA has had a positive impact on the retail sector and small businesses, primarily through expanded unemployment benefits, tax credits, and funding designed to support economic recovery and boost consumer spending. Unemployment payments were increased by $300 per week (extended through September 6, 2021), and Pandemic Unemployment Assistance was expanded to self-employed, freelancers, and gig workers, many of whom are part of the small business ecosystem.
The package also introduced an expansion of tax credits for lower-income workers with children and an enhanced Earned Income Tax Credit for workers without children, likely increasing disposable income and consumer spending, indirectly benefiting retail businesses. Although the direct retail sector-specific funding details are limited, the broader support mechanisms—like stimulus checks, expanded unemployment benefits, and tax relief—have increased overall household income, helping stimulate economic activity and retail sales by bolstering household spending power.
For small businesses, the package included provisions such as extensions and expansions of unemployment benefits that helped retain workers and maintain payroll, along with subsidies for employee benefits like COBRA premium assistance, helping businesses manage labor costs while navigating the pandemic’s economic challenges.
The ARPA also includes $50 billion in aid to small businesses, providing much-needed relief to many struggling to pay rent, as per research from small business platform Alignable. Additionally, the bill includes anti-poverty measures, direct relief of $1,400 per person to 85% of consumers, unemployment support, and investments in vaccine manufacturing and distribution.
The retail industry has been actively involved in providing vaccines to employees and consumers in communities they serve across the country. The improving public health picture and the promise of further fiscal relief provide an optimistic outlook for the economy over the next two years.
However, Cecilia Rouse, chair of the White House Council of Economic Advisers, warns that the economy remains down 9.5 million jobs from February 2020 and will require more than two years of job growth at February’s pace just to get back to pre-pandemic levels. Despite this, the swift development of vaccines, with their deployment set to speed up, only adds to the momentum already building in retail.
The House is expected to approve the Senate's changes early this week, and the economy added 379,000 jobs last month, pushing the unemployment rate down to 6.2% from January’s 6.3%, according to the Bureau of Labor Statistics. As the recovery continues, the retail industry is hopeful for a brighter future, thanks in part to the American Rescue Plan Act.
- The American Rescue Plan Act's (ARPA) passage in March 2021 has sparked optimism in the retail sector and small businesses, led by its positive impact on unemployment benefits, tax credits, and economic recovery funding.
- The ARPA's stimulus package is projected to boost the U.S. real GDP growth this year by 6.2%, signifying the fastest recovery since the late 1950s.
- Unemployment payments have been increased by $300 per week, extended through September 6, 2021, and Pandemic Unemployment Assistance has been expanded to aid self-employed, freelancers, and gig workers.
- The ARPA has introduced expansions of tax credits for lower-income workers with children, as well as an enhanced Earned Income Tax Credit for workers without children, potentially boosting consumer spending.
- Although retail sector-specific funding details are limited, the ARPA's broader support mechanisms are boosting overall household income, stimulating consumer spending and economic activity.
- For small businesses, the ARPA includes provisions like extensions and expansions of unemployment benefits, along with subsidies for employee benefits, aiding labor costs management during the pandemic.
- The ARPA provides $50 billion in aid to small businesses, offering relief to many struggling to pay rent, according to research from small business platform Alignable.
- The ARPA includes anti-poverty measures, direct relief, unemployment support, and investments in vaccine manufacturing and distribution.
- The retail industry is actively involved in providing vaccines to employees and consumers and anticipates a brighter future due to the American Rescue Plan Act, as the economy recovers and the job market improves.
