Early-Year Tax Refund Bonanza Ends
During February and the first week or two of March, Individual Tax Refunds were running notably ahead of 2011 comparable data. More importantly, after a slow start, the rapid increase in refunds could have perhaps helped buffer the initial gas-price-related 'tax-hike' consumers were concerned about and yet not showing up in retail sales. However, as Stone & McCarthy notes today, the IRS reports that the dollar volume of individual income tax refund issuance lost ground once again to last-year's pace - now down 1% YoY (compared to being up 5.2% in mid-February). 4.3% more tax returns have been received and 2.6% more have been processed at this time compared to last year - and yet the average size of tax refunds are down 2.9% YoY even as the number of refunds is higher. It is perhaps a little premature to forecast the entire tax season, but, for now, what looked like a promising fillip for the consumer as tax refunds provided some extra spending power, appears to be slowing rapidly and removing yet another albeit small bowl of stimulus grool from the consumer's bowl.