The National Retail Federation (NRF) raised its holiday sales forecast to 3.3 percent, or $451.5 billion, from 2.3 percent, saying stock market gains and income growth combined with great deals on merchandise have given consumers the capacity to spend.
The increase in forecast follows a better-than-expected retail sales report from the U.S. Commerce Department, which showed November retail sales rose 0.8 percent, following a 1.7 percent gain in October.
According to the National Retail Federation, retail industry sales for the month of November rose 0.8 percent seasonally adjusted over October and 6.8 percent unadjusted over last year.
The start to the holiday season has surpassed all expectations, said NRF chief executive Matthew Shay. While employment data is still a concern, we are starting to see improvement in other economic indicators that support an increase to our forecast.
Sales at clothing and clothing accessory stores grew 2.7 percent seasonally adjusted over last month and a strong 9.6 percent unadjusted year-over-year. Sporting goods, hobby, book and music stores sales increased 2.3 percent seasonally adjusted month-to-month and 15.5 percent unadjusted year-over-year.
Health and personal care stores sales increased 0.9 seasonally adjusted over October and 7.3 percent unadjusted over last year. General merchandise stores sales increased 1.3 percent seasonally adjusted over last month and 4.2 percent unadjusted year-over-year.
Consumers have not been suffering from a lack of spending power, they’ve just been missing the confidence to use it, said NRF Chief Economist Jack Kleinhenz. With noticeable improvement in key economic indicators combined with great deals on merchandise, consumers have certainly shown they shouldn’t be counted out this holiday season.