Local businesses are getting hit particularly hard.
On-again, off-again consumers in Reno and Sparks appear to be hitting the brakes again, cutting back their spending as the number of COVID-19 cases reported in the region rises.
The slowdown is coming even though the pandemic recession appears to be over for upper- and middle-income workers in Washoe County. Lower-wage workers continue to be hard-hit.
Spending in Washoe County during the Thanksgiving week — a critically important time for retailers — ran 19.6% below its pre-pandemic levels, finds an analysis by Harvard-based Opportunity Insights. That marks a sharp decline from early November, when spending during any single week was down no more than 10% than pre-pandemic levels.
The slowdown came as the number of active COVID-19 cases in the county increased four-fold during November, and the growth in new cases built momentum late in the month.
Opportunity Insights is generating almost real-time data on consumer behavior during the pandemic by using data from credit and debit transactions, stripped of information that identifies individual consumers.
During April, spending in Washoe County was about 33% below pre-pandemic levels. (Opportunity Insights uses January as its benchmark, the last month when things were “normal” and business hadn’t been impacted by COVID-19 worries.)
Local businesses are getting hit particularly hard.
Sales at small businesses in Washoe County in late November were running nearly 40% lower than the days before the arrival of COVID-19, Opportunity Insights reports, and the number of small businesses that are open these days is down by more than a third. Those figures are roughly the same as national averages.
But many consumers apparently have money to spend. The number of people working in jobs that pay at least $60,000 a year in Washoe County has increased by more than 5% since early this year, the Harvard researchers report. Middle-wage jobs — those paying $27,000 to $60,000 — have increased by about 2%. But the number of low-wage jobs in the county’s economy still hasn’t recovered. Employment for those workers is down by 21% since January.
While the Harvard researchers paint a dire picture, another viewpoint — this one created when consumers pay sales tax on a purchase — hasn’t been nearly so dark this autumn.
A few days ago, the Nevada Department of Taxation said taxable retail sales in Washoe County during September were 4.7% higher than the same month a year earlier. Opportunity Insights, meanwhile, was reporting that sales during September were running about 13% below pre-pandemic levels.
What accounts for the difference?
A big one is this: The Opportunity Insights data is based entirely on credit- and debit-card use. So it doesn’t capture sales of items such as cars and trucks that typically aren’t purchased with plastic.
That makes a big difference in Washoe County.
Taxable sales at car dealerships in Washoe County during September were up about 11% — a figure that represents about $12 million in additional consumer spending.
Then, too, the state’s data and the Opportunity Insights figures are comparing different time periods. The state looks at sales 12 months ago; Opportunity Insights uses last January as its starting point. And the state figures include taxes collected by manufacturers, wholesalers and other businesses, not just those paid by shoppers in stores or online.
