On November 22, as they always do on the fourth Thursday in the next to last month of the year, Americans collectively will sit down together to celebrate Thanksgiving. The three days that follows will mark yet another national tradition, the busiest shopping days of the year and the start of the all-important seasonal shopping rush, which will run through all the way to the end of the year.
Economically in 2018, things are looking good. According to retail analyst eMarketer, holiday retail sales in the United are expected to climb above the $1 trillion mark for the first time. Total will climb by 6 percent from the 2017, it estimates, reflecting the strongest growth since 2011.
Online spending is expected to soar by 14.8 percent, in contrast to an expected 2.7 percent growth in brick and mortar stores.
While also optimistic, the American National Retail Federation (NRF) provided a more cautious forecast. U.S. holiday sales, including brick and mortar and online, will increase by 4.3 percent to 4.8 percent from a year ago, when consumer spending surged to a 12-year high. The NRF added that the holiday sales growth will be higher than an average increase of 3.9 percent over the past five years but slower than 2017’s 5.3 percent gain, when consumer spending grew the most since 2005.
ONLINE SPENDING SHOWING MASSIVE GROWTH
Showing massive growth is U.S. online spending, which is forecast to grow by 14.8 percent in 2018 to $124.1 billion, which is considerably more than the 2.7 percent growth predicted for brick-and-mortar locations. Online sales this year is likely to benefit from an extra day between Cyber Monday and Christmas, which according to Adobe Analytics is likely to provide a $284 more in revenue.
American consumers say they will spend an average of $1,007.24 during the holiday season this year, up 4.1 percent from the $967.13 they said they would spend in 2017, according to an annual survey released by the NRF and Prosper Insights & Analytics.
“The holidays are just around the corner and consumers are ready to shop,” said NRF President and CEO Matthew Shay. “Confidence is near an all-time high, unemployment is the lowest we’ve seen in decades and take-home wages are up. All of that is reflected in consumers’ buying plans.”
CONSUMER CONFIDENCE SOARS TO 18-YEAR HIGH
The carefully watched Conference Board consumer confidence index increased again in October, following a modest improvement in September. IT now stands at its highest level in 18 years.
The Consumer Board’s consumer confidence index stood at 137.9 in October, up from 135.3 in September. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – improved from 169.4 in September to 172.8 in October, while the Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – increased from 112.5 in September to 114.6 in October.
Gross domestic product grew at the fastest pace in nearly four years in the second quarter and continued to grow at a solid 3.5 percent annual rate from July through September.
The American unemployment rate is 3.7 percent, its lowest level since 1969.