The National Retail Federation has revised its holiday forecast, predicting a sales growth of 3.8%, up to a record $469.1 billion, after initially forecasting a 2.8% year-over-year increase. The new prediction is well above the ten-year average sales increase of 2.6%, as more consumers have opened their wallets this season than expected.
What This Means for 2012
“After strong sales reports in October and November, along with a successful Black Friday weekend, retailers are cautiously optimistic that this season will turn out better than initially expected, bringing added stability to our recovering economy at a time when America needs it most,” said NRF President and CEO Matthew Shay.
Mark Zandi, Chief Economist for Moody’s Analytics, told ABC News that both low and high-income households have increased spending due to higher confidence, saving less and putting more money back into the economy. “Households are spending with some gusto,” he noted. “A solid Christmas buying season will set a very positive tone for the economy going into 2012.”
While the NRF reports that personal income fell slightly in 2011, the association’s statistics indicate that consumers are going into their savings more to spend, which may imply that they have more confidence about the economy going forward.