Retail Sales Post Strong Recovery Ahead of Holiday Season
Kiplinger’s latest forecast on retail sales and consumer spending.
Retail and food service sales jumped 1.9% in September. The laggards of the recovery, clothing and department stores and restaurants, are finally bouncing back, though they have not yet recovered fully to their prepandemic levels. Motor vehicle sales were strong, while e-commerce, building materials, and sporting goods/hobby stores remained the best-performing categories relative to precrisis levels.
Sales are now near or above February levels for most store categories. After consumers socked away more savings in recent months, they have had cash to spend on big-ticket items such as cars and home improvement projects. They are spending more on goods right now than on services, so almost all retail sales categories are benefiting.
Holiday sales are shaping up to be strong this year. E-commerce is leading the way with an expected 29% rise over last year. Even in-store sales will do well, up 5% over last year’s holiday season. However, gains are likely to be uneven. Many smaller regional malls have lost anchor tenants such as Sears and JCPenney, and so should see traffic diminish.
The recent surge of COVID-19 infections in 33 states could slow the recovery progress of restaurants, clothing and department stores. Things were just getting better for this group. Restaurants have been figuring out how to operate with health precautions, but likely will remain limited in their capacity for some time to come. Also, the arrival of colder weather will start to limit outdoor dining.
- 1Kiplinger’s Economic OutlooksRegularly updated insights on the economy’s next moves.
- 2GDP: -4.9% growth in 2020, 3.8% in 2021Kiplinger’s latest forecast for the GDP growth rate
- 3JOBS: States are reopening, but workers will come back slowlyKiplinger’s latest forecast on jobs
- 4INTEREST RATES: 10-year T-notes staying below 1.0% for a whileKiplinger’s latest forecast on interest rates
- 5INFLATION: 1.2% through ’20 from 2.3% at end ‘19 Kiplinger’s latest forecast on inflation
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- 7ENERGY: Crude oil trading from $35 to $40 per barrel this fallKiplinger's latest forecast on the direction of energy prices
- 8HOUSING: Single-family starts down 6.6% in '20Kiplinger's latest forecast on housing starts and home sales
- 9RETAIL SALES: In-store holiday sales up 5%, e-commerce up 29% - currently readingKiplinger’s latest forecast on retail sales and consumer spending.
- 10TRADE DEFICIT: Widening 4% in ’20Kiplinger's latest forecast on the direction of the trade deficit.