“Will Washington be the Grinch who stole Christmas?” That zinger is courtesy of Associated Press retail reporter Anne D’Innocenzio, who wrote that the partial government shutdown and the temporary reprieve on a default could cast a pall over the upcoming holiday shopping season.
With retailers getting 40 percent or more of their sales during the next few weeks – there are 59 days left before Christmas, if you’re wondering – any economic uncertainty could force consumers to pull back on their spending.
The National Retail Federation, usually a cheerleader and gung-ho about shopping, put a qualifier on its holiday forecast.
Earlier this month, NRF forecast sales this year would increase 3.9 percent to more than $602 billion, higher than the 3.5 percent increase during the November-December selling/buying spree last year.
But, the AP story noted, the forecast didn’t account for a prolonged shutdown and its impact.
NRF chief economist Jack Kleinhenz told the AP he may lower the holiday forecast once he reviews the delayed retail sales and jobs data.
“It’s like having an ongoing fever that you would like to shake but just doesn’t get away,” he told the AP. “That causes a backup in decision-making from consumers and businesses.”
RetailMeNot, a digital coupon site, released a study that polled more than 10,000 consumers in 11 countries, including the U.S.
That survey showed that American consumers are worried about the cost of holiday gift-giving this year. Yet, more than half – 56 percent – plan to spend as much, if not more, than what they spent last year.
As the AP noted, the recent shutdown/default debacle wasn’t the first time shoppers have had to deal with Washington follies.
Last year there was the fiscal cliff looming. While retail sales rose in November, the growth was much less in December as the cliff approached.
Could the same thing happen this year, with another default deadline approaching Jan. 15?
In August 2011, another debt ceiling debate raged, and consumer sentiment fell to a 31-year-low.
Consumer confidence earlier this month dropped to its lowest since January as the government shutdown approached. Interestingly, it didn’t drop as far as many experts had expected.
Still, retail sales in the first week of October were noticeably lower from the same period a year ago. Was that a blip, or a sign of things to come?
Meanwhile, seasonal hiring has begun, and NRF expects retailers to hire 720,000 to 780,000 workers for the holidays. Last year, retailers put about 720,500 temporary employees on their payrolls, which was 13 percent more than 2011.
People are still jittery. But are they too jittery too shop? Likely not. But if the boneheads in Washington don’t get their act together soon, we’ll keep talking about “uncertainty” beyond the holidays.
Contact Dennis Seid at (662) 678-1578 or email@example.com.