Despite a high level of economic and political uncertainty, holiday sales are forecast to grow a solid 3.8% to 4.2% this November and December, the National Retail Federation (NRF) says.
The world’s largest retail trade association also said Thursday it expects retailers to hire between 530,000 and 590,000 temporary workers.
U.S. holiday sales totals are expected to reach between $727.9 billion and $730.7 billion this year, excluding purchases at automobile dealers, gasoline stations and restaurants. Online sales, which are included in the total, are expected to grow between 11% and 14%, with sales of $162.6 billion to $166.9 billion.
By comparison, last year’s total sales were $701.2 billion, of which $146.5 billion was from online sales.
NRF’s forecast indicates that consumers are not curtailing spending despite tariffs, the trade war, possible presidential impeachment, and evidence that economic growth is slowing. But in this environment, that could change in a hurry, forecasters cautioned.
“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,” said NRF President and CEO Matthew Shay.
In short, job growth and higher wages mean there’s more money in families’ pockets, and that is driving consumers’ willingness and ability to spend, NRF Chief Economist Jack Kleinhenz explained.
“There are probably very few precedents for this uncertain macroeconomic environment,” 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.”
Since 2010, holiday sales has grown from $528 billion to $701 billion, with annual increases ranging from 2.1% in 2018 to 5.2% in 2010 and 2017. The average rate of increase in year-over-year sales is 3.7%, according to NRF.