Retail Federation Sees Holiday Sales Rising 4.1%
NEW YORK -- As the holiday shopping season is about to start, the National Retail Federation projects that sales will increase 4.1% over last year.
Jack Kleinhenz, economist for the trade association, offers why he foresees the $616.9 billion retail sales increase.
He defines “holiday sales” as those between Nov. 1 and Dec. 31, well before the unofficial Black Friday kickoff. Because the U.S. Department of Commerce collects data on a monthly basis, using the full months of November and December makes crunching the numbers easier, he says. All retail sales but autos, gasoline and restaurants are included.
Holiday spending should reflect the improving economy marked by moderate and steady growth. Employment, income and consumer confidence are all improving, the economist says.
Unemployment claims have been below 300,000 more than a month. Consumer confidence has reached post-recession highs this year. The University of Michigan Consumer Confidence Index, for example, increased 1.8 points in October to 86.4, its best reading in more than seven years.
Nonetheless, confidence continues to be erratic, Kleinhenz says. With gasoline prices and unemployment low and consumers having less debt they should feel a bit better about their circumstances but they remain cautious.
Credit conditions are improving. “Consumers continue to choose and use credit very strategically,” Kleinhenz says. Revolving credit, though uneven over the past year, has risen recently.
“As we observed last year, holiday retail sales can be severely impacted by any transitory factor from higher personal taxes and the debt ceiling debacle to a federal government shutdown and severe winter weather. This year, it’s too soon to predict the weather but at least Congress has kept the government open and there is no immediate talk of tax increases (well, at least not federally),” Kleinhenz said.
Regardless, he sees shoppers remaining cautious and adhering to their budgets, which allow slightly greater spending this year than last.
Published by The Business Journal, Youngstown, Ohio.
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