Washington – The National Retail Federation (NRF) predicts that holiday sales this year will grow 8.5% to 10.5% from 2020 – which was itself a record season with sales up over 8.0%.
The NRF’s retail sales calculation excludes car dealerships, gas stations and restaurants to focus on core retail. The association defines the holiday season as the period between November 1 and December 31. Because so many consumers started shopping early this year, NRF chief economist Jack Kleinhenz said part of 2021 sales could be recorded in October.
The forecast for 2021 vacation sales is $ 843 billion to $ 859 billion.
“Consumer spending has held up relatively well,” he added at a press conference this morning. âThe prospects for personal income are good. “
While consumers are aware and concerned about inflation, it has not impacted their spending.
âI think that at this point consumers are able to absorb these price increases and [that is] not as much of an obstacle as it once was, âhe said.
While inventory shortages are also a concern for consumers, NRF President and CEO Matthew Shay noted that retailers brought in goods early and planned for the challenges.
It has been a banner year for sales so far, Shay said. Sales in the first nine months of 2021 increased by more than 14.5% year-on-year. By comparison, full-year sales for 2020 increased by almost 7.0%.
Key factors that went into the NRF forecast included:
- Savings: US consumers currently hold between $ 4.2 trillion and $ 4.3 trillion in savings.
- Disposable income: Households are in debt and are not too indebted. âIt’s a big difference from where we were before the Great Recession,â Kleinhenz said. The ratio of unpaid balances to disposable income is at its lowest in 20 years.
- Use: Although the employment rate was lower than expected in September, the three-month average of initial and continuing claims is declining. âWe expect labor market gains over the last three months of the year. It should add income and expense, âhe said.
- Pandemic: Covid-19 rates are dropping. In addition, the authorization of boosters and vaccines for children provides additional protection.
âOverall, households are fundamentally very strong,â Shay said.