The National Retail Federation (NRF) has released its latest forecast for the upcoming holiday season and the results are surprisingly positive. As usual, the forecast excludes automobile dealers, gasoline stations and restaurants. It also takes into account a variety of indicators including employment, wages, consumer confidence, disposable income, consumer credit and previous retail sales. All things considered, the NRF expects sales throughout November and December to rise above last year between 3.8- and 4.2 percent. If those numbers are correct, total sales for the season could fall somewhere between $727.9 and $730.7 billion.
“The U.S. economy is continuing to grow and consumer spending is still the primary engine behind that growth,” NRF President and CEO Matthew Shay said. “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."
Because of how Thanksgiving, Black Friday, and Christmas fall on the calendar this year, the 2019 shopping period is the shortest it’s been since 2013. Still, retailers feel they need some extra hands to help with the hustle-and-bustle, which is why seasonal hiring expected to increase as well. The NRF expects retailers to hire between 530,000 and 590,000 temporary workers for 2019 which is in line to trump last year’s 554,000.
Unfortunately for consumers though, many popular gifts have already been hit with tariffs including apparel, footwear and televisions. Other tariffs will go into effect on Dec. 15—a move the president made in an effort to avoid humbugging the holidays. But smaller businesses have already been forced to raise their prices, and it’s something that’s been on the minds of consumers a lot recently. In spite of this economic uncertainty though, we’ve also seen job growth and higher wages, which are two big contributing factors that have seemingly overshadowed tariffs.
“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.”