The association expects U.S. holiday sales to rise 3% this year. That is down from 4.1% in 2010, but much better than the drops of 1.3% in 2009 and 6.1% in 2008.
What is concerning is that 3% growth does not get the industry anywhere close to the growth rates in the first half of the decade, when year-over-year improvements were often 5% or better.
Retail sales are still one of the most vicious cycles in the economy. Poor consumer spending pressures retail profits. That in turn triggers lay-offs. People laid off are not likely to visit malls and stores. The cycle has been in place for almost all of the holiday shopping months over the past four years.
Many economist expect GDP growth in the fourth quarter to be as low as 1%. That is probably not enough to support the International Council of Shipping Centers forecast of 3% retail growth in the final two months of the year. If 2008 and 2009 are any indications, thousands of stores will close in January of 2012, and that will cost the economy tens of thousand of jobs.
Douglas A. McIntyre
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