Nov. 7, 2024 — The National Retail Federation (NRF) expects holiday sales to continue growing steadily this year, despite recent mixed economic indicators, according to NRF chief economist Jack Kleinhenz.
“The economic data calendar was quite busy at the end of October, but while there were contradictions and mixed signals, we continue to believe the U.S. economy remains in a good place,” says Kleinhenz in the November issue of NRF’s Monthly Economic Review. “Most importantly, the new data doesn’t change our 2024 holiday forecast or retail sales projections for the year.”
On Oct. 15, NRF predicted retail sales during the November-December holiday season would increase by 2.5% to 3.5% over last year, reaching a projected $979.5 billion to $989 billion.
Two weeks after this forecast, new government data showed the economy added just 12,000 jobs in October, and GDP growth slowed to 2.8% in the third quarter, down slightly from 3% in the previous quarter. Kleinhenz attributed the decline in job growth to temporary factors, including hurricanes and labor strikes, noting that employment had grown by 104,000 jobs on a three-month average. He added that GDP growth remains robust, extending a 10-quarter streak of increases despite inflation and high interest rates, bolstered by steady consumer spending.
Wages, as measured by the Employment Cost Index, increased by 3.9% year-over-year in September, the slowest growth since late 2021 but still remaining above inflation. The Personal Consumption Expenditures Price Index, favored by the Federal Reserve as a measure of inflation, showed a year-over-year increase of 2.1% in September, close to the Fed’s 2% target and the lowest since February 2021.
“Putting all these considerations together, this holiday season looks very good,” says Kleinhenz. “Households are starting the season in decent financial shape and are managing the constraints of their paychecks, with growth in wages and salaries still supportive of a steady pace of spending. The economy remains on solid footing and is growing faster than many expected.”