VALLEY — Federal stimulus money is believed to have caused a 164 percent increase in retail sales and lowered the unemployment rates in the San Luis Valley for the period of January through September, 2019-2021.
“The largest increases were in 2020 and 2021 during the pandemic,” according to Hew Hallock, director of research for the San Luis Valley Development Resource Group.
“Like all across the country, folks in the Valley spent the stimulus dollars they received – big time,” Hallock said. “The money came through several sources including direct payments to each citizen, increased unemployment benefits, unemployment benefits for self-employed and farmers, as well as business support programs like PPE. These sales are brick-and-mortar sales, as well as internet sales.”
He noted that internet sellers began collecting state and local sales tax in 2019, which enabled the state to begin tracking internet sales.
Retail sales in the SLV vaulted to $1,139,350,526 in the period of Jan.-Sept. 2021, up from $930,540,000 in 2020 and $430,679,00 in 2019.
Costilla County saw the largest percentage of increase for the period, up 265 percent, with Saguache County (241%), Conejos County (217%) and Rio Grande (214%) not far behind. Mineral County had a 121 percent increase, while Alamosa jumped 119 percent with the Valley’s largest total of retail sales for the period in 2021 at $484,418,700.
The largest increase in spendable income over the research period came in taxable goods over services, Hallock said, based on suggestions from Chris Akers, economist for the Colorado State Demography office. He noted a large spike in spending on goods beginning in January 2020, surpassing spending on services by May 2020 and continuing through September 2021.
Hallock said Akers also pointed out that lower income levels in the SLV could have led to more spending on goods rather than saving it or paying off debt.
Another observation from Akers, unlike resort towns that have lots of bars, restaurants and hotels, communities in the Valley were spared the effects of early shutdowns and largely avoided the recession. A different source said this may not say anything about recovery but more about how areas managed, according to Hallock.
Akers said he expected sales of goods to slow going into 2022 and 2023.
Hallock’s research found that the spending spree helped boost the local economy and avoid a recession. Second quarter unemployment rates dropped in each county in the Valley from 2020-2021.
“It kept workers working,” Hallock said.
The largest decrease for that period in the SLV came in Costilla County where unemployment dropped from 6.6 percent to 4.6 percent. Mineral County dropped from 4.8 to 3.5 percent while Saguache dropped from 5.6 to 4.4. Other counties saw Alamosa drop from 5.5 to 4.3, Conejos from 4.3 to 3.6 and Rio Grande from 5.2 to 4.5.
Colorado’s unemployment rate overall for the same period fell from 6.9 to 5.4 percent.
Hallock said he own observation is there is still a lot of available funding for businesses.
“With the first infrastructure bill enacted, more will be coming along,” he said. “The next couple of years will tell how well the Valley and other rural communities fare.”