A woman carries Nike shopping bags in the Citadel Outlet mall while the global coronavirus disease (COVID-19) outbreak continues in Commerce, California on December 3, 2020.

Lucy Nicholson | Reuters

Government stimulus controls are likely to have boosted spending in January and the trend should continue to pick up momentum as the economy reboots.

Economists expect retail sales to jump 1.2% after a surprising drop of 0.7% in December, according to Dow Jones. The January retail sales report is due to be released on Wednesday at 8:30 a.m. (CET). A 1% increase in sales excluding vehicles is also expected.

“I think the main narrative is that things have turned around,” said Stephen Stanley, chief economist at Amherst Pierpont. “November and December were pretty negative. As the virus picked up pace, people crouched down. In January you had a little runoff from it.”

Stanley said spending was also likely to be increased by $ 600 stimulus checks sent to individuals in early January as part of the latest Covid Relief Act passed by Congress in late December. He expects sales to grow 0.8%, but those gains could be even bigger in the next few months.

“The $ 900 billion tax break has come into the economy and shows it,” said Mark Zandi, chief economist at Moody’s Analytics. “It’s really strong across the board. It was mostly home-based retailing. Electronics and appliance stores and online would be good examples. But in January that was all. The reopened retailers also showed strength in clothing stores and clothing stores Restaurants saw an upswing. “

Zandi expects retail sales to grow 2.1% based on business-to-business data from software company Cortera, which tracks transactions for small and medium-sized businesses.

“The Cortera numbers are clearly strong. I think we’ll run unless the pandemic is going in a bad direction,” he said. “The economy will boom.”

According to Cortera, retailer spending on unpaid expenses increased 16.7%. Cortera said the level is 5% above December’s level, suggesting retail sales will rise too.

Economists also saw other signs that spending was rising.

“Credit card and debit card data suggests retail sales have been pretty strong,” said Diane Swonk, chief economist at Grant Thornton. “We’ve also eased some damage control measures that should also help, and these all came before we had the devastating cold that was slowing things down.”

Swonk said the stimulus checks are important. “I really think we were nearing a double dip. We had a pretty dramatic slowdown when we left towards the end of the year,” she said.

The Biden administration has proposed another $ 1,400 stimulus check going through Congress. This should also improve consumers’ ability to spend.

“People are being vaccinated. It will be another surge of activity,” said Stanley, Amherst Pierpoint’s economist. “I would think we will improve fundamentally from now until the middle of the year. I think it will really open in March.”