Economists, Retailers Paint Different Pictures Of Consumer Health
Retail investors hoping for a busy holiday shopping season will either be extremely encouraged or discouraged, and it all depends upon who they listen to.
According to Gadfly's Shelly Banjo, retailers are saying their outlook for the holiday season is the "shakiest" it has been in years. For instance, just 49 percent of retail chains reported sales at established locations rose in the second quarter on a year-over-year basis, the lowest reading for any quarter since 2009.
In fact, retail sales have "gotten so bad," companies have now added the U.S. presidential election to their "list of reasons why shoppers aren't coming into their stores."
Meanwhile, the National Retail Federation is expecting a 3.7 percent year-over-year growth in sales during the all-important holiday shopping months of November and December. Other reports, such as those from PricewaterhouseCoopers (PwC), are calling for a year-over-year holiday sales growth as much as 10 percent.
And who are behind these predictions? Economists.
Banjo suggested that economists are likely looking at Friday's jobs report, which showed continued improvements in both the labor market and wages. Consumer confidence levels could also lead economists to conclude the consumers are indeed in "good spirits."
Banjo also noted that rising health care, housing and travel costs could also explain "where some of the money is heading."
So, which one is it? Are retailers bracing for further trouble ahead? Or, are the economists right, and maybe consumers are merely waiting for good sales?
"Either way, Americans will no doubt whip out their pocketbooks to spend this holiday season," Banjo concluded. "Just don't expect a like-for-like translation into sales growth for traditional retailers in the coming quarters."
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