While it is not always easy to tell how stable the market is—and the US economy, overall—the National Retail Foundation says that consumers appear to feel pretty good about it. The trade group says they predict consumers will spend more this holiday season than they did last year. More specifically, the trade group predicts total holiday sales will reach somewhere between $727.9 billion and $730.7 billion. That is an increase of around 4 percent from last year.
For a point of reference, holiday retail sales totaled upwards of $701.2 billion, which was not only quite small but unusual as well.
According to National Retail Foundation President and CEO Matthew Shay, “The US economy is continuing to grow and consumer spending is still the primary engine behind that growth. 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 continued deterioration of these and other variables.”
Shay attests the trade group analyzes at least two dozen metrics in order to determine this forecast. He goes on to say that while political rhetoric in Washington largely involve trade concerns and international market volatility—which could weigh quite heavily on consumer sentiment—the trade war with China has not affected this confidence; at least, not for now.
As such, Shay notes growth expectations is higher than the five year average of 3.5 percent. In addition to this, growth expectations are trending higher than the most recent growth estimates, which have been weighed down on escalating concern over a potential government shutdown, rising interest rates, and international trade conflict.
This in mind, American retailers are exercising different approaches to limit the impact of the Trump administration’s new tariffs. Small businesses, for example, have already been forced to raise prices; which is unfortunate. The group also identified nearly 80 percent of consumers expressed concern that tariffs will, indeed, cause inflation. That, of course, could impact holiday spending.