It has been a few days since the end of the year and the numbers are finally in; and it looks like this holiday season was one of the best the US has seen since the most recent recession.
While not everyone seems to have been a part of the trend, the numbers don’t lie and sales were up in November and December, this year, by 5.5 percent—to $691.9 billion—according to the National Retail Federation. It is important to note these results do not including consumer spending on cars, gas, but does include sales in restaurants. At the same time, it should also be noted that e-commerce sales (and other sales which occur outside of traditional brick-and-mortar stores) shot up nearly 12 percent.
Indeed, MUFG Union Bank chief financial economist Chris Rupkey comments, “We aren’t sure who gets the credit for the strongest advance in consumer spending since 2010, but it is likely tied in part to the massive tax cuts from Washington and perhaps the Fed’s easy money too-low interest rate policy for this stage of the business cycle with the economy in its ninth year of expansion from the end of the recession.” The client note continues, “The tax cut from Washington may just make this the longest economic expansion in modern economic history looking back to the 1970s.”
These numbers are important, of course, because this particular metric is a key gauge not just for the industry but for the economy as a whole, as the US economy cranks out roughly 65 percent of its output from consumer spending.
Of course, this positive outlook is, in fact, a good marker for retailers, who have been struggling of late. You may not be aware, but around fifty retailers filed for bankruptcy last year and this includes some pretty big brands like Toys R Us and Payless Shoe Source, as described by S&P Global Market Intelligence. In addition, Fung Global Retail & Technology advises 2017 also saw nearly 7,000 announced store closures.
National Retail Foundation chief executive officer Matthew Shay interjects, “Whether they shopped in-store, online or on their phones, consumers were in the mood to spend, and retailers were there to offer them good value for their money.”
Prior to this season, the trade group had estimated growth between 3.6 and 4 percent.