The federal government earmarked about $600 billion in the CARES Act relief package for $1,200 stimulus checks per person, as long as they made less than $99,000 per year. The money rolled out in April…and then found its way to Walmart and Target.
Americans used the money to buy everything from video games to sewing machines even as the country struggles with record job losses.
Walmart and Target Corp noted in their earnings call this week that quarterly comparable sales, which rose about 10%, got a major boost from increased demand for non-essentials at the end of last month.
Walmart Chief Executive Doug McMillon said:
“Call it relief spending, as it was heavily influenced by stimulus dollars.”
He cited a jump in sales of clothing, televisions, video games, sporting goods and toys.
The funds also found their way to retailers such as Best Buy and Advanced Auto Parts.
Advance Auto Chief Executive Tom Greco said:
“We did see an increase on the week of the stimulus, but the week after the stimulus was better … And then two weeks after was better than one week after. So we are seeing that sequential improvement.”
So we know a couple of things. Many Americans spent their stimulus checks on junk they don’t need, and now that the money’s gone some portion of them won’t have cash when they really get into a bind as their temporary job loss becomes permanent.
That’s when we’ll be asked to fund yet another round of checks. Walmart and Target must be giddy.