Despite the ongoing coronavirus pandemic, the Chief Economist for the National Retail Federation says American consumers have incredible resiliency, helping businesses to rebound.
National Retail Federation Chief Economist Jack Kleinhenz says today that retail sales have largely recovered from the pandemic heading into the holiday season, but the growing number of COVID cases remains a threat and additional federal stimulus could help keep the economy on track.
Kleinhenz reports, “Strong growth in retail sales during the last few months points to the resiliency of consumers even in this disruptive pandemic environment,” and adds, “Taking in all the evidence available, the U.S. economic recovery has progressed more quickly than generally expected.”
Kleinhenz agreed with Federal Reserve Chairman Jerome Powell’s recent call for additional federal stimulus, which the chairman said “will not go to waste” even if it is more than necessary.
Kleinhenz contends, “While there might be sufficient momentum and resiliency to propel the economy in the months ahead, additional fiscal policy support is critical to ensure that the recovery doesn’t stall.”
Kleinhenz’s remarks came in the November issue of the National Retail Federation’s Monthly Economic Review, which noted that retail sales have been up both month-over-month and year-over-year each month since June. Retail sales have completed a V-shaped recovery and are up 8.6-percent since January, according to data from Harvard University’s Opportunity Insights research project.
Household spending on retail goods has helped bring back overall consumer spending, which was down 16.1-percent year-over-year in April but only 1.9-percent as of August, according to the Commerce Department.
The report points to increased disposal personal income, which was up 5.4-percent year-over-year as of August, and a savings rate of 14.4-percent that has remained in double digits for six straight months. Even though the government stimulus has tapered off, Kleinhenz says, “Savings are available if consumers decide to spend more aggressively.” While consumer confidence remains below pre-pandemic levels, it has been rising.
The National Retail Federation is awaiting additional economic data before releasing its annual holiday spending forecast. However, consumers surveyed for NRF by Prosper Insights & Analytics plan to spend an average $997.79, down about $50 from last year as they focus more on gifts for others rather than purchases for themselves. The Federation launched a New Holiday Traditions campaign last month, encouraging consumers to shop safe and shop early to avoid overcrowding stores and to take advantage of early holiday discounts.
The National Retail Federation, the world’s largest retail trade association, advocates for the people, brands, policies and ideas that help retail thrive. From its headquarters in Washington, D.C., the federation empowers the industry that powers the economy. Retail is the nation’s largest private-sector employer, contributing $3.9 trillion to annual GDP and supporting one in four U.S. jobs — 52 million working Americans. For over a century, NRF has been a voice for every retailer and every retail job, educating, inspiring and communicating the powerful impact retail has on local communities and global economies.
