US Retailers See Big Jump in Holiday Sales
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US holiday sales in Y 2018 will increase 4.3 to 4.8% boosted by a strong economy, but will be slower than a year ago when consumer spending surged to a 12-year high, according to a forecast from a leading retail industry group.
The National Retail Federation (NRF) said holiday sales growth will be higher than an average increase of 3.9% over the past 5 years but slower than the 5.3% growth witnessed a year earlier when consumer spending grew the most since Y 2005 and was boosted by tax cuts.
“Last year’s strong results were thanks to growing wages, stronger employment and higher confidence, complemented by anticipation of tax cuts that led consumers to spend more than expected,” NRF’s Chief Economist said.
“With this year’s forecast, we continue to see strong momentum from consumers as they do the heavy lifting in supporting our economy,” he said.
The combination of more jobs, improved wages, tamed inflation and an increase in net worth all provide the impetus to spend, he added.
The trade body also said there are continued concerns about the trade dispute with China, but it is optimistic about consumers’ propensity to spend.
The retail trade group said it expects sales for the last 2 months of the year between $717.45 and $720.89-B, excluding autos, gasoline and dining out.
Holiday sales in Y 2017 were $687.87-B.
NRF’s forecast is one of the most closely watched benchmarks ahead of the holiday season, when retailers like Amazon.com (NASDAQ:AMZN) Walmart Stores (NYSE:WMT) and Target Corp (NYSE:TGT) generate an outsized portion of their profits and sales
The last 2 months of the year can account for 20 to 40% of annual sales for many retailers.
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