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Child Tax Credits Could Stimulate Retailers

Starting July 15, U.S. households with children will begin receiving monthly payments for each child in the household. Part of the American Rescue Plan, the child tax credits will put money into the hands of low and middle-income families to spend on necessities, which could lead to a stimulus for retailers

Under the American Rescue Plan, households will receive $3,000 per child ages six to 17 and $3,600 for any child under the age of six. The payments will come monthly, directly to households’ bank accounts. The child tax credits follow in a line of government programs, which included three stimulus checks and additional unemployment benefits, aimed at helping individuals and families economically through the pandemic. 

JPMorgan estimates the child tax credit payments will boost retail sales by 0.7 percent. That increase is far below the lift in retail sales the stimulus checks and unemployment benefits brought, which were 15 percent and 2 percent, respectively, in March and April 2021. But, after a challenging last 18 months, retailers welcome any increase in sales.

The news of a potential increase in retail sales from the tax credits is another piece of good news for retailers following on the tail of the National Retail Federation’s revised sales forecast. NRF is predicting a jump in retail sales of 10.5 to 13.5 percent above 2020’s sales numbers. 

About Lindsey Thompson

Lindsey Thompson

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