Economic Perspective: The Outlook For Holiday Buying

MARY WALDEN:

“Today’s program looks at the outlook for holiday shopping. Mike, as always there’s anticipation about how robust the holiday shopping period will be. With the economy appearing to be improving faster I detect some added optimism about this year. Do economists think this optimism will be fulfilled?”

MIKE WALDEN:

“We think so. I emphasize think because you never know. The economy can throw us through a loop, but right now sort of the common estimates for the increase in holiday sales this year compared to last year are for sales to be up about four to five percent.”

“That would be a growth rate twice as much as what it was last year. So this would be a very, very optimistic holiday shopping season if that four to five percent comes true.”

“Now why the optimism? Well, I think it’s driven by the fact that we’ve seen consistent job growth. We’re creating 180,000-200,000 jobs nationwide a month, a better hiring market for workers due to relatively low unemployment and, I think this is the clincher, signs that wage growth may be accelerating. This meaning putting more money into people’s pockets.”

“Now right now there’s also an optimism about tax cuts. I think we’re seeing an optimism both among businesses and households. If those tax cuts don’t come, whatever your opinion on them, if they don’t come that could maybe throw these estimates off. So I think there is some caution there.”

“I think one for sure is we are going to continue to see a shift out of holiday sales at tradition brick-and-mortar stores to cyber buying. In fact this year, will probably be a year where the total amount of buying on the Internet will exceed the total amount of buying at traditional stores.”