How Record Unemployment Could Play Into a Huge Holiday Season
The holiday season is just around the corner, and with that comes the busy period for retailers. An unemployment rate near record lows could prove to be a big catalyst for retailers, assuming consumers have more money to spend from these jobs.
Deloitte recently announced what it expects to see this retail season. Ultimately, the firm believes retail sales are likely to increase between 4.5% and 5.0% in 2019. Moreover, Deloitte’s retail and distribution practice anticipates that holiday sales will exceed $1.1 trillion during the November to January timeframe.
E-commerce is making up a greater portion of holiday sales every year, and Deloitte sees more big numbers coming this year. The firm forecasts that e-commerce sales will grow by 14% to 18% year over year during the 2019 to 2020 holiday season, compared to sales increasing by 11.2% in 2018. The robust growth likely will result in e-commerce holiday sales reaching between $144 billion and 149 billion this season.
Deloitte is speculating that this holiday season increase reflects expectations for consistent growth throughout the season. However, because last year’s holiday sales came in lower than expected in December, the 2019 forecast predicts a strong growth rate in comparison to 2018’s more modest growth.
Last December, the government shutdown, an uptick in consumer savings and a sharp stock market decline may have led to the lower growth season.
Daniel Bachman, Deloitte’s U.S. economic forecaster, commented:
The projected holiday season growth is, in part, due to the current health of the labor market. Near record-low unemployment rates, coupled with continued monthly job creation, may encourage people to spend more during the holiday season. The economy is still growing, albeit at a slower rate. Additionally, we continue to see consumer confidence elevated, which also helps boost holiday spending.