On Tuesday, the National Retail Federation announced that it expects holiday spending to increase over last year. The NRF says retail sales in November and December—with the exception of gas, auto, and restaurant sales—will increase by a steady 3.6 percent, to reach $655.8 billion. This is notably higher than the 10-year average of 2.5 percent as well as slightly higher than the 7-year average of 3.4 percent (since the beginning of the recovery, in 2009).
In addition, the NRF forecasts non-store sales will increase somewhere between 7 and 10 percent, to perhaps as much as $117 billion.
According to NRF President and CEO Matthew Shay, “All of the fundamentals are in a good place, giving strength to consumers and leading us to believe that this will be a very positive holiday season. This year hasn’t been perfect, starting with a long summer and unseasonably warm fall, but our forecast reflects the very realistic steady momentum of the economy and industry expectations.”
2015 holiday sales, they say, have increased 3 percent over the numbers from last year.
Shay continues, “We remain optimistic that the pace of economic activity will pick up in the near term.”
Also, NRF Chief Economist Jack Kleinhenz notes, “Consumers have seen steady job and income gains throughout the year, resulting in continued confidence and the greater use of credit, which bodes well for more spending throughout the holiday season. Increased geopolitical uncertainty, the presidential election outcome and unseasonably warm weather are the main issues at play with the greatest potential to shake consumer confidence and impact shopping patterns.”
At the same time, though, Kleinhenz explains that consumers have remarkable spending power and, furthermore, it is resilient and “should never be underestimated.”
Obviously, the NRF forecast is considered the benchmark of the whole retail industry. And today’s forecast, of course, is based on an economic model factoring such things as consumer credit as well as personal income and monthly retail sales.
As such, NRF anticipates that non-store sales—a trend which has skewed more towards digital—will still improve between 7 percent and 10 percent, to reach, perhaps $117 billion.
Kleinhenz continues, “We have a lot more people working this year,” which, of course, is a sign of increased demand.