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Black Friday Marks Start of What Should Be a Strong Spending Season

ShoppingWith Black Friday around the corner, all signs point toward a healthier holiday season at U.S. retailers, said Bob Hughes, senior research fellow at the American Institute for Economic Research.

The holiday season typically makes up about 20 percent of annual retail sales, excluding automobiles and gasoline.

Retail sales were up by about 5 percent in 2011, and 4 percent in 2012. Sales were expected to continue to grow at around the same pace last winter, but amid colder than expected weather, came in roughly 3.3 percent higher than a year ago, Hughes said. Still, that showed spending continued to grow after the recession, Hughes said.

The fundamentals are again in place for stronger spending this season, Hughes said.  The labor market is improving, wages are up, consumer confidence is up, and net worth is at a record high along with the stock market, he said.

The unemployment rate, which hit 10 percent during the recession, was 5.8 percent in October.

One Comment Post a comment
  1. Gilbert W. Chapman #

    As someone who has read about these sort of “Christmas Sales Forecasts” for four decades, I am continuously amazed that some economists actually believe that “colder than expected weather” has any measurable impact on holiday retail sales.

    Let’s face reality for a moment or two. Would you not go out and buy a model train set for a child if the temperature was 25 degrees outside, rather than 50 degrees?

    Would you not go out to purchase a watch fob for your husband’s watch because there was a little snow on the ground? Or, would you not buy your wife a set on combs she had longed for because ‘icy road patches’ were predicted? (Think O. Henry and “The Gift of the Magi”.)

    I recently decided to give our young granddaughter that new model train set mentioned above for Christmas. Now . . . Do you really think I’m not going to drive 25 miles to a mall because ‘freezing rain’ is predicted?

    For these many years, all I’ve witnessed is incompetent, whining retail store executives (think J.C. Penney, Sears, et al) who chose to blame Mother Nature, rather than themselves, for missing sales goals.

    Like

    November 24, 2014

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