A Merry Holiday Season?
The National Retail Federation (NFR) expects holiday retail sales during November 1st through December 31st to increase between 3.8 to 4.2 percent over 2018. The numbers exclude automobile dealers, gasoline stations and restaurants.
“The U.S. economy is continuing to grow and consumer spending is still the primary engine behind that growth,” said NRF President and CEO Matthew Shay .
In spite some of the uncertainty around trade with China, global risk factors and political movements, overall consumer confidence is very high when compared to the last couple of decades.
“Nonetheless, there has clearly been a slowdown brought on by considerable uncertainty around issues including trade, interest rates, global risk factors, and political rhetoric, consumers are in good financial shape and retailers expect a strong holiday season. However, confidence could be eroded by the continued deterioration of these and other variables.”
“There are probably very few precedents for this uncertain macroeconomic environment,” NRF Chief Economist Jack Kleinhenz said.
“There are many moving parts and lots of distractions that make predictions difficult, there is significant economic unease, but current economic data and the recent momentum of the economy show that we can expect a much stronger holiday season than last year. Job growth and higher wages mean there’s more money in families’ pockets, so we see both the willingness and ability to spend this holiday season.”
It is still uncertain how new tariffs will affect holiday spending: some products will already be subject to new tariffs that took effect September 1st, and others will have tariffs applied on December 15th.
The NRF holiday forecast is based on an economic model that takes into consideration a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit and previous retail sales.