US retailers on Tuesday reported a banner kickoff weekend to the holiday shopping season and expressed confidence about sales in the coming weeks, despite escalating trade conflicts.
In the five-day period from Thanksgiving Day through “Cyber Monday,” shoppers spent an average of $361.90, up 16 percent from the year-ago period, according to the National Retail Federation.
Nearly 190 million people shopped over the stretch, up from last year’s level, and equal to about 57 percent of the entire US population, according to the NRF.
“This was an outstanding weekend,” said NRF Chief Executive Matthew Shay. “People are feeling more confident and maybe that confidence is reflected in their behavior.”
Survey data showed impressive growth in online shopping on “Black Friday” as well as strong sales among younger consumers, more of whom shopped at department stores and other brick-and-mortar stores than in recent seasons.
The NRF has projected overall holiday sales growth of between 3.8 percent and 4.2 percent in 2019 to as much as $730.7 billion, basing the forecast on data that includes consumer spending trends in recent months, energy costs and payroll trends.
Analysts have cautioned that some of the boost in this year’s early sales figures is due to the shortness of the 2019 season due to the lateness of the Thanksgiving holiday.
In any case, the NRF is hoping to avoid a repeat of the 2018 season, which fizzled after a solid start.
A grain of salt?
Last year’s season sharply underperformed forecasts due to a number of factors, including a Federal Reserve interest rate hike in December, a government shutdown and escalations in the US-China trade war that contributed to a late-year swoon in the stock market.
On Tuesday, US stocks were down about one percent in the aftermath new punitive trade announcements by US President Donald Trump on France, Argentina and Brazil and as the US-China trade dispute remained unsettled with new tariffs on Chinese goods potentially going into effect later this month.
Survey data shows consumers are worried about tariffs but shoppers “have the ability to bifurcate their attitude, which is knowing they have a concern about it and their actions and activities, which is that they’re still out shopping and behaving in a very confident way,” Shay said.
NRF Chief Economist Jack Kleinhenz said the 2018 season was plagued by a “very unusual December” and that “we don’t have necessarily that same set of factors today that we saw a year ago.”
But Ian Shepherdson of Pantheon Macroeconomics cautioned that early sales results should be taken with a grain of salt.
“The holiday shopping season has changed beyond all recognition over the past decade and the new patterns are not yet fully established and stable,” he wrote in a note to clients.
“The unfortunate truth for impatient markets is that we just won’t know how retailers fared over the holiday season as a whole, and how much spending rose in Q4, until we have both the November and December data.”