Black Friday is only 10 days away! Will you brave the mall? As you stand in the long lines, we’ll give you some tidbits to think about with how your purchases play a part in boosting the economy this holiday season.

See below for more…

This year retailers are expecting much more than a lump of coal. Major retailers and shipping companies are expecting holiday sales to increase more than 4 percent. We haven’t seen 4 percent growth since 2011. Throughout the last decade, holiday sales have averaged 2.9 percent growth.

Many retailers have already announced significant hiring plans to meet the demand—so seasonal workers may be up as much as 10 percent from last year. A couple of primary shipping companies are even doubling their holiday workforce largely due to demand coming from e-commerce.
1So while you can see that most of the economic data in the United States supports a rather jolly shopping season, we can’t ignore some risks that could shake consumer confidence. A correction in the stock market, or signs of a recession in Europe are events that would in – fact, affect this forecast.

However, we strongly believe that consumers are in better financial health for a number of reasons:

  • Household net worth is at an all time high. This is due to higher stock and home prices.
  • The labor market is solid. Unemployment is less than 6 percent and job growth has been increasing at a nice pace. These employment gains should continue as there are 4.8 million job openings, a level we haven’t seen since 2001.
  • You are probably noticing lower prices at the pump as well. That translates to more disposable income in consumer’s pockets.
  • And finally, consumer confidence has been trending up since the Great Recession. And when we feel good about things, we consume.

There are even more factors that point to a better holiday season than last year:

  • Last year the government shutdown in the fourth quarter may have shaken consumer confidence and affected spending – we aren’t facing that situation this year.
  • Unseasonably cold and stormy weather led to some store closings across the nation.
  • Lastly, in 2013 there were six fewer shopping days between Thanksgiving and Christmas compared to 2012. This year there is one additional day, which makes year over year comparable sale easier to beat.

We think this holiday shopping season will support our forecast of 3 percent economic growth in the fourth quarter.  We also expect to see positive returns in the domestic stock markets.

I wish all of you a happy and healthy holiday season. I’ll be back to deliver part two of this forecast after Thanksgiving.


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