Stats: Holiday Spending to Rise Up to 5.6% This Year

Growth
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Looking for an overall sense of where the economy is headed into the holiday season? Deloitte is forecasting that retail holiday sales are expected to increase a robust 5 to 5.6 percent over last year’s shopping season, according to the organization’s annual retail holiday sales forecast.

Deloitte's retail and distribution practice expects total holiday sales (seasonally adjusted and excluding motor vehicles and gasoline) to exceed $1.10 trillion between November and January.

Additionally, Deloitte forecasts a 17 to 22 percent increase in e-commerce sales in 2018 compared with 16.6 percent in 2017. E-commerce sales are expected to reach $128 to $134 billion during the 2018 holiday season.

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"The anticipated growth in holiday sales is likely because of solid disposable personal income growth, which we expect will be in the 5 to 5.4 percent range. That is above last year's 4.7 percent," said Daniel Bachman, Deloitte's U.S. economic forecaster, in a written statement. "A strong labor market should also aid retail spending, along with elevated consumer confidence and a stable personal savings rate of around 7 percent."

While these fundamentals are expected to boost holiday spending, Deloitte's economist cited potential risks that may affect spending in the coming months. Some of the impact of Fed tightening could be felt before the end of the year. Some observers have speculated the stock market is overvalued. A significant decline in the market could push down consumer confidence and reduce household wealth, both of which would moderate the forecasted rise in retail spending.

"Consumer sentiment and spending indicators provide a healthy outlook for retailers across channels with strong expectations for store-based and online retailers," said Rod Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader.

Source: Deloitte

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