While U.S. economic data remains strong, many are cautious about how it will perform in 2020, particularly in the light of the ongoing trade war between the world’s largest economy and its closest rival, China.
In the meantime, forecasters remain upbeat at far as the end of the year is concerned. According to a recent Deloitte survey, holiday retail sales this year could increase by 4.5 percent to 5 percent, exceeding $1.1 trillion.
“I think this will be a surprise for our clients,” said Rod Sides, vice chairman of Deloitte’s U.S. retail and distribution practice in the United States, speaking to CNBC “I think most [retailers] would expect a slightly lower increase.”
Deloitte’s optimistic prediction was even surpassed by the global consulting firm of AlixPartners, which predicted sales growth over the holiday season of 4.4 percent to 5.3 percent.
CONCERN ABOUT UNPREDICABLE TRADE POLICY
Growth at present in the U.S. retail markets is generally robust. According to National Retail Federation, sales were up 4.6 percent year-over-year. Online and other non-store sales were up 14.3 percent.
“While consumer attitudes about the economy indicate some retreating optimism, the bottom line is that consumer spending remained resilient in August and continued to be a key contributor to U.S. economic growth,” NRF Chief Economist Jack Kleinhenz said. “Trends remain strong, but August grew somewhat slower than July, which could reflect consumers’ concerns about the unpredictability of trade policy. It is too early to assess the impact of the new tariffs that took effect at the beginning of this month, but they do present downside risks to household spending.”
A new 15 percent tariffs on a wide range of consumer goods from China took effect September 1 and are scheduled to be expanded to additional goods on December 15, covering a total of about $300 billion in imports. In addition, 25 percent tariffs already in effect on $250 billion worth of imports are set to increase to 30 percent on October 15.
Total only sales by U.S retailers are expected to approach the $150 billion mark over the coming holiday season, growing by 14 percent to 18 percent, up from about 12 percent in 2018.
American jewelry consumers reported bought 5 percent less during the first half of the 2019, compared to the same period in 2018.
JEWELRY MARKETS MORE SUBDUED
Jewelry specific data for August is not yet available but judging from figures recorded during the first half of the year, there the mood is more subdued.
According to the U.S. Census Bureau, sales at specialist jewelry stores in the United States were about 5 percent during the first half of 2019, to $14.39 billion, when compared to the same period a year before. In June 10 percent fall was recorded, with sales equaling $2.31 billion.
There was a 1.6 percent uptick in July of sales at American specialist jewelry stores, but this preceded the September 1 rise in trade tariffs on Chinese imports imposed by the Trump administration.
The nervousness about the direction of the U.S. economy is most predictably reflected in the consumer confidence index, which according to Conference Board declined marginally in August. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – also was down.
But said Lynn Franco, Senior Director of Economic Indicators at the Conference Board, there did yet not seem reason for concern. “While parts of the economy may show some weakening, consumers have remained confident and willing to spend,” she stated. “However, if the recent escalation in trade and tariff tensions persists, it could potentially dampen consumers’ optimism regarding the short-term economic outlook.”