US Tax Refunds Surge 12% in First Six Weeks of 2024

Tax Refund Payouts Jump 12% in Early Season

According to a weekly analysis by DA Davidson, data from the IRS reveals that total tax refunds have increased by 12.0% through the first six weeks of the season compared to the same period last year. This growth rate has remained steady, accelerating from the prior week's cumulative increase of 10.9%.

Overall Situation

The current refund season is on track to be the largest since at least 2013. In the most recent week, the total number of refunds delivered rose by 7.4% versus the same week last year. The average refund amount also saw a significant increase of 13.0%, reaching $3,277. Consequently, the total refund dollars for the week surged by 21.4% year-over-year, accelerating from the 8.6% increase recorded the previous week.

Economic and Market Impact

DA Davidson closely monitors this data to track short-term spending patterns, particularly among lower-income consumers who typically spend their refunds quickly. The trends are especially relevant for retail businesses serving this demographic, including major players like Walmart (NYSE:WMT), Grocery Outlet (NASDAQ:GO), Citi Trends (NASDAQ:CTRN), auto parts retailers, and used vehicle dealers such as Carvana (NYSE:CVNA).

Summary

While the initial figures indicate a robust start to the tax season, the firm cautions that it is still early to draw definitive conclusions about the overall growth trajectory for the entire refund period compared to previous years. The market will continue to monitor these trends for signs of sustained consumer spending.

FAQ

Q: How much have tax refunds increased so far this season?
A: Through the first six weeks, total tax refunds are up 12.0% compared to the same period last year.

Q: What is the average tax refund amount?
A: The average refund amount in the most recent reported week was $3,277, a 13.0% increase from the year-ago period.

Q: Which sectors are most affected by tax refund spending?
A: Retailers serving lower-income demographics, such as Walmart, Grocery Outlet, auto parts stores, and used car dealers like Carvana, are closely watched as refund recipients often spend quickly.

Source: Investing.com