Consumer Confidence Driving Holiday Spending
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A rise in consumer spending in the last days of December has offset the slow start to the US Holiday shopping season, and is likely to help many retailers beat sales forecasts according to the data.
The December spending boost is in contrast to the soft November action, when early Holiday promotions and expectations among consumers that deals would always be available dampened buying.
Spending over the Thanksgiving weekend in November fell 3.5% from a year ago despite a strong online sales, according to the National Retail Federation (NRF).
Sales data released Tuesday showed the major retail buying shift in late December
Brick-and-mortar sales in the week ending 24 December rose 6.5% Y-Y after having fallen for the rest of the month, according to analysts data.
Strong demand for furniture, home furnishings and men’s apparel from the start of November through Christmas Eve pushed US retail sales up 4%, higher than expected 3.8%, according to data from MasterCard’s Holiday spending report released Tuesday.
The report, which tracks spending by combining sales activity in MasterCard’s payments network with estimates of cash and other payment forms, offers an early look into how the Holiday season shaped up.
Official government data and results from retailers will not be available until January.
The spike in spending prompted a prominent retail consultant to raise his Holiday sales forecast. The President of consultancy Customer Growth Partners, said in an interview that he now estimates sales growth of 4.9% in November and December, up from his initial estimate of 4.1%. He said he expects this year to be the strongest since Y 2005, and sales momentum is likely to remain strong until the New Year.
There is growing evidence that an improving job market, lower gasoline prices and growing consumer sentiment all contributed to the surge.
President Elect Donald Trump attributed the spending increased to his coming move into the Oval Office.
“The world was gloomy before I won – there was no Hope. Now the market is up nearly 10% and Christmas spending is over a trillion dollars!” Donald Trump wrote on Twitter.
American shoppers are ebullient.
The biggest beneficiary of the Holiday season continued to be Amazon (NASDAQ:AMZN), which outperformed its rivals again this year, research firms said. Tuesday, Amazon called the Holiday season its “best ever.”
Wednesday, the US major stock market indexes finished at: DJIA -111.36 at 19833.81, NAS Comp -48.89 at 5438.55, S&P 500 -18.96 at 2249.92
Volume: Trade was below average with 734.9-M/shares exchanged on the NYSE
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