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February 13, 2008

Tax Rebate Checks to Immediately Pump $43 Billion Into Economy

Note to media: Click here for a full report of the survey.

For Immediate Release
Contact: Scott Krugman or Kathy Grannis (202) 783-7971
krugmans@nrf.com or grannisk@nrf.com

Tax Rebate Checks to Immediately Pump $43 Billion into Economy,
According to NRF Survey
--Americans to Bolster Spending Power by Paying Down Debt and Saving--

Washington, February 13, 2008—“To spend or save?” may be a question many analysts are asking about tax rebate checks, though a new survey finds that many families are planning to do both when the checks are distributed.

According to a new National Retail Federation survey, conducted by BIGresearch, consumers plan to spend 40.6 percent of tax rebate checks when they are distributed later this year, which will provide an immediate $42.9 billion boost to the economy. The survey also found that the $105.7 billion distributed in tax rebate checks will be used to pay down debt ($30.0 billion), saved ($19.8 billion), invested ($4.4 billion), and used to pay down medical bills ($4.6 billion).

“Tax rebate checks should have the desired effect of both bolstering the economy in the short-term and putting consumers in a better position to spend for the future,” said NRF President and CEO Tracy Mullin. “This stimulus package is a crucial component to economic recovery and will provide much-needed relief to American shoppers.”

Earlier today, President Bush signed H.R. 5140, the Recovery Rebates and Economic Stimulus for the American People Act of 2008. The $152 billion measure will provide tax rebate checks of up to $600 per working individual and $1,200 per married couple, plus $300 per child for families with children and new tax incentives for job-creating business investments.

“Many Americans will be wisely using their rebate checks to save, spend, and pay down debt, so the overall result will be positive for the U.S. economy,” said Phil Rist, Vice President of Strategy for BIGresearch. “While some will splurge on big ticket items, many consumers will use the checks for important day-to-day purchases.”

While women will spend a larger percentage of their rebate check than men (42.2% vs. 38.7%), both genders will plan to set aside the same percentage for savings (18.7%) Young adults 18-24 will spend more of their checks (46.2%) than any other age group.

The NRF 2008 Tax Rebates Consumer Intentions and Actions Survey was designed to gauge consumer behavior and shopping trends related to the upcoming tax rebates. The survey, which polled 7,977 consumers, was conducted for NRF by BIGresearch from February 5-12. The question asked, “The President and Congress are discussing options for sending families rebate checks ranging from $600 - $1,200. If you get one, what will you do with the money?” The consumer poll has a margin of error of plus or minus 1.0 percent.

BIGresearch is a consumer market intelligence firm that provides unique consumer insights that are gathered online utilizing very large sample sizes. BIGresearch’s syndicated Consumer Intentions and Actions survey monitors the pulse of more than 7,000 consumers each month to empower its clients with unique insights for identifying opportunities in a fragmented and changing marketplace.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail companies, more than 25 million employees - about one in five American workers - and 2007 sales of $4.5 trillion. As the industry umbrella group, NRF also represents over 100 state, national and international retail associations. www.nrf.com

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