Americans appear to be in the buying spirit this Christmas, as the 2021 holiday season is on target to reach even larger numbers than the National Retail Federation’s original projections. According to NRF Chief Economist Jack Kleinhenz, holiday spending could break new records this season.
“Now that we’re in December, the holiday shopping season is nearing the finish line,” Kleinhenz said in the December issue of the National Retail Federation’s Monthly Economic Review. “The question is how have factors ranging from economic indicators to the twists of the COVID-19 pandemic affected the season so far, and what role will they play in the weeks that remain? There’s no crystal ball to provide a definitive answer, but the latest data is encouraging and provides useful insights. In fact, the season could turn out even better than we expected.”
“Consumers and retailers have both revised their playbooks and broken with previous traditions,” Kleinhenz added. “With the momentum we’ve seen so far likely to continue, it seems probable that we will exceed our initial projection.”
According to the Monthly Economic Review, holiday retail sales in the U.S. for November and December could be an upwards of 11.5% higher than the same period in 2020. The NRF’s initial projections had holiday sales up between 8.5% and 10.5%.
The Census Bureau will report official November sales on Wednesday (Dec. 15). According to the Bureau, overall consumer spending was up by 1.3% in October, marking the biggest monthly increase since March.
The increased spending is partly a result of the hot job market. Initial unemployment claims dropped to their lowest level since 1969 the weekend before Thanksgiving, and the national unemployment rate hit a new pandemic low of 4.2% in November.
“The holiday season clearly looks to be off to a good start,” Kleinhenz said. “Consumers remain in solid financial shape and do not appear to be stretched.”