Retail Sales to Hold Up Despite Consumer Stress
Look for a lackluster back-to-school season, with shoppers not buying until forced.
We still expect retail sales to increase about 3% this year, despite recent evidence of consumer fatigue -- in June’s dreary retail sales numbers from the Census Bureau and scant hopes for a big rebound in July.
Stronger job growth along with lower gasoline prices will drive up consumer spending in coming months, though the 3% gain will be short of retail sales growth in 2010.
But retailers will have to work hard to get shoppers to spend more. Cost-conscious consumers will continue to keep their eyes peeled for discounts. Hefty price markdowns and free shipping for online orders will become commonplace.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
This year’s back-to-school sales may not be much to write home about: The average American family probably won’t spend more than the $600 it spent on school needs a year ago. And once again, most parents will wait until school starts to buy school supplies.
One bright spot in June’s retail sales report: Auto sales and parts forged a comeback. They rose 0.8% after struggling from March through May in the face of supply disruptions following the March earthquake in Japan. Auto dealers posted their first gain since February.
However, excluding sales of cars, gasoline and building materials, consumer purchases, including furniture, electronics, personal care and sporting goods, declined broadly.
Consumers also cut back on dining out in June -- a sure sign of stress. Consumer spending for the second quarter overall was close to zero, a big contrast to the 4% increase in the fourth quarter last year.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
Upstart Stock Sails Higher as Lending Boom Boosts Q3 Results
Upstart stock is scaling the charts Friday after the AI lending platform beat Q3 expectations on strong loan growth. Here's what you need to know.
By Joey Solitro Published
-
Nevada Approves Diaper Tax Relief Amid Childcare Crisis
Tax Relief Nevada voters have expanded sales tax relief to diapers. But are prices still too high?
By Kate Schubel Published
-
Start-ups Trying to (Profitably) Solve the World’s Hardest Problems
The Letter More investors are interested in companies working on breakthrough science to tackle huge societal challenges. The field of deep tech has major tailwinds, too.
By John Miley Published
-
The Big Questions for AR’s Future
The Letter As Meta shows off a flashy AR prototype, Microsoft quietly stops supporting its own AR headset. The two companies highlight the promise and peril of AR.
By John Miley Published
-
China's Economy Faces Darkening Outlook
The Letter What the slowdown in China means for U.S. businesses.
By Rodrigo Sermeño Published
-
AI Start-ups Keep Scoring Huge Sums
The Kiplinger Letter Investors continue to make bigger bets on artificial intelligence start-ups, even for small teams with no revenue. Some backers think a startling tech breakthrough is near.
By John Miley Published
-
Should We Worry About the Slowing U.S. Economy
The Letter With the labor market cooling off and financial markets turning jittery, just how healthy is the economy right now?
By David Payne Published
-
New Phones Get All the Hype, but Consumers Still Love Old Models
The Letter Even as flashy artificial intelligence features drive sales of new smartphones, used phones continue to fetch big bucks as demand outstrips supply.
By John Miley Published
-
Starlink's Internet Beamed From Space Is Taking Off
The Kiplinger Letter Satellite broadband provider Starlink is taking over the space market. Amazon’s mega-constellation will soon join the fray, adding to the unprecedented disruption.
By John Miley Published
-
Kiplinger Special: How Businesses Should Budget for 2025
Kiplinger Forecasts From fuel to AI software subscriptions, here's what you can expect to pay next year.
By John Miley Published