While coronavirus spikes in Europe have led to new shutdowns in several major countries—including the U.K., where retail footfall is now estimated to drop 62 percent from last year’s holiday shopping season—large-scale lockdowns in the U.S. have not yet been announced in response to the latest wave of cases.
Consequently, remarks by the National Retail Federation chief economist Jack Kleinhenz in the association’s Monthly Economic Review November issue were generally positive.
Retail sales have largely recovered from the pandemic heading into the holiday season, he said. Still, he cautioned that the growing number of coronavirus cases remain a threat. According to Johns Hopkins University, daily recorded cases in the U.S. hit a new high on Oct. 30 and the percentage of tests returning positive continues to rise, though still below the first and second peaks in the spring and summer.
“Strong growth in retail sales during the last few months points to the resiliency of consumers even in this disruptive pandemic environment,” Kleinhenz said. “Taking in all the evidence available, the U.S. economic recovery has progressed more quickly than generally expected.”
According to the November issue of NRF’s Monthly Economic Review, retail sales have been up both month-over-month and year-over-year each month since June. According to data from Harvard University’s Opportunity Insights research project, retail sales have finished a V-shaped recovery and are up 8.6 percent since January.
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An additional federal stimulus could help keep the economy on track, Kleinhenz noted. He 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.
“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 said.
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.
In NRF’s September data, the association found U.S. retail sales to be up 1.9 percent, led by apparel and accessories stores, which rose a seasonally adjusted 11 percent from August. Department store sales were up 9.7 percent from August. September’s data, however, also represented a seasonally adjusted 12.5 percent decline year-over-year for apparel and accessories specialty stores and a 7.3 percent decline for department stores.
NRF is awaiting additional economic data before releasing its annual holiday spending forecast. 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 association said.
Last month, NRF launched a New Holiday Traditions campaign encouraging consumers to shop safe and shop early to avoid overcrowding stores and to take advantage of early holiday discounts.