- National Retail Federation says retail sales have been steadily improving since the start of the COVID-19 pandemic
- Holiday spending forecast not yet available, but recent survey suggests that the average person will spend slightly less money this year
- NRF voices support for additional federal stimulus, saying it can help keep the economy on track as COVID-19 cases rise
The chief economist for the National Retail Federation issued an optimistic report recently, saying sales at retail establishments have largely recovered after cratering at the start of the COVID-19 pandemic. However, he was also cautious about how a third wave of infections could impact the traditional holiday shopping season and said a new round of federal stimulus would help stabilize the economy.
In the November issue of NRF’s Monthly Economic Review, Jack Kleinhenz said retail sales have improved on both a monthly and annual basis since June and are now 8.6 percent above pre-pandemic levels in January. Overall consumer spending has also improved; it was down 16.1 percent from the previous year in April, but the gap narrowed to 1.9 percent in August.
While consumer confidence remains below pre-pandemic levels, Kleinhenz says it has been on the rise and that shoppers have shown resiliency during the pandemic. Personal incomes were up in August and the savings rate has been in the double digits for six months, giving consumers a potential source of funds if they choose to spend more lavishly for the holidays.
NRF and other retail organizations have encouraged consumers to do their holiday shopping early this year, both to improve businesses’ fourth quarter finances and to ensure that they do not receive their orders late due to potential supply chain disruptions caused by COVID-19. The organization has not yet issued its holiday spending forecast, but a recent survey found that consumers plan to spend an average of $997.79 for the holidays this year – down $50 from 2019.
Kleinhenz says the increasing cases of COVID-19 across the country could jeopardize the economic gains, as they may trigger tighter restrictions on stores and other businesses. He reiterated Federal Reserve Chairman Jerome Powell’s call for more federal stimulus, saying this aid will be crucial to supporting businesses and ensuring that the U.S. economic recovery does not stall.
Partisan disagreements in Congress have hindered any further stimulus. Senate Majority Leader Mitch McConnell says he doesn’t expect a bill until early next year, though both House Speaker Nancy Pelosi and President Donald Trump say they are hopeful that stimulus will be passed before then.
