“Today’s program looks at the holiday spending outlook. Mike, here we are again talking about holiday spending. Every year it seems it just kind of sneaks up on us. It appears to me that this year the economy has been more uncertain. Does this bode the same for holiday spending?”
“Well, let’s go back to last year, a year ago. Actually we have the numbers in; holiday spending last year as measured by how much of an increase it was over the previous year was not very good. Last year, holiday spending went up about two percent. Most economists think that was because at this time last year the stock market was really wobbly. We had some big losses in the stock market, and we think that affected the amount of spending people did.”
“This year, although there is uncertainty about the economy, as we’ve moved towards the end of the year a lot of the indicators are pointing up. Business and consumer confidence are both doing rather well. Jobs are being created faster than many of us expected. Interest rates have settled down to a normal pattern, and there is optimism about a trade deal with the Chinese.”
“So right now the forecast for holiday spending is looking pretty good. I’ve seen forecasts indicating somewhere between a four to five percent gain in spending this year over last year. Now one thing we do think is going to set a record, and that is we think that for this year, for 2019, for the first time ever holiday spending in non-store situations where you’re buying online, that is to say you’re not going into a store to buy your present. That spending outside of stores is going to consume the most ever. It’s going to actually be a majority of all holiday spending, that will be a record, the first time it’s ever happened.”
Mike Walden is a William Neal Reynolds Distinguished Professor and Extension Economist in the Department of Agricultural and Resource Economics at North Carolina State University who teaches and writes on personal finance, economic outlook and public policy.