(December 3, 2021)


The 2021 holiday season appears to be on track to exceed the National Retail Federation’s earlier forecast.

Despite supply chain disruptions, inflation, and challenges like the new COVID-19 omicron variant, the National Retail Federation’s (NRF) chief economist said today that holiday spending can turn out even better than the retail trade association earlier forecasted.


“Now that we’re in December, the holiday shopping season is nearing the finish line. The question is how have factors ranging from economic indicators to the twists of the COVID-19 pandemic affected the season so far, and what role will they play in the weeks that remain? There’s no crystal ball to provide a definitive answer, but the latest data is encouraging and provides useful insights. In fact, the season could turn out even better than we expected. Consumers and retailers have both revised their playbooks and broken with previous traditions. With the momentum we’ve seen so far likely to continue, it seems probable that we will exceed our initial projection.”

Jack Kleinhenz
NRF Chief Economist



Kleinhenz’s remarks came in the December issue of NRF’s Monthly Economic Review.

Highlights:

  • 11.5% | Holiday retail sales during November and December could grow as much as 11.5 percent over the same period in 2020.
  • Between 8.5% and 10.5% | Such spending would exceed NRF’s forecast that holiday sales would be up between 8.5 percent and 10.5 percent.
  • Consumers remain in solid financial shape and do not appear to be stretched. With shopping starting earlier, the Thanksgiving weekend (including Small Business Saturday) now helps to mark off the holiday season rather than serving as the kickoff it once was.
  • 4.1% | Over the past year, disposable personal income has been up 4.1 percent
  • 12% | During the past year, personal spending has increased 12 percent
  • Initial unemployment claims fell to their lowest level since 1969 the weekend before Thanksgiving
  • 546,000 jobs were added to payrolls in October followed by 210,000 in November
  • 4.2% | The November unemployment rate fell to a new pandemic low of 4.2 percent.
  • Initial unemployment claims fell to their lowest level since 1969 the weekend before Thanksgiving
  • 546,000 jobs were added to payrolls in October followed by 210,000 in November
  • 4.2% | The November unemployment rate fell to a new pandemic low of 4.2 percent.
  • 4.2 million jobs | Continued strong growth rates will reduce the 4.2 million jobs needed to return employment to pre-pandemic levels

However, there are “potential economic wildcards”

NRF economist Kleinhenz called the COVID-19 omicron variant “the latest wildcard raising uncertainty around the economic outlook,” but said it is too early to predict what impact it will have on the economy. The University of Michigan Index of Consumer Sentiment declined to 67.4 in November, its lowest level in a decade, but Kleinhenz said spending data is a more relevant measure of consumer behavior.

Source

NRR Monthly Economic Review: December 2021

GettyImages

Related Articles