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Holiday Sales Growth Misses Expectations

NRF questions government data showing increase of just 2.9%.
Feb 17, 2019 8:02 AM   By Rapaport News
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 US holiday sales increased 2.9% in 2018, but the growth was significantly lower than what the National Retail Federation (NRF) had forecast. 

Total sales for the November-to-December period were $707.5 billion, according to figures from the Commerce Department. The NRF had predicted sales would rise between 4.3% and 4.8%. The official figures were released nearly a month late following the partial US government shutdown.

That number falls well below the NRF’s forecast that holiday sales would reach $717.45 billion to $720.89 billion, and has left analysts questioning the reliability of the information.

“All signs during the holidays seemed to show that consumers remained confident about the economy,” NRF CEO Matthew Shay said last week. “However, it appears that worries over the trade war and turmoil in the stock markets impacted consumer behavior more than we expected. There’s also a question of whether the government shutdown and resulting delay in collecting data might have made the results less reliable.”

Online sales grew 11.5% to $146.8 billion, according to the government data.

Sales in December alone increased 0.9% year on year following two months of stronger retail revenues. Purchasing in November rose 5.1% over the previous year, while October — which is not officially part of the holiday season — saw sales climb 5.7% year on year, as consumers began buying earlier than in previous years.

“Today’s numbers are truly a surprise and in contradiction to the consumer spending trends we were seeing, especially after such strong October and November spending,” NRF chief economist Jack Kleinhenz said. “The combination of financial market volatility, the government shutdown and trade tensions created a trifecta of anxiety and uncertainty impacting spending and might also have misaligned the seasonal adjustment factors used in reporting data.”

The federation will be better placed to assess the results’ reliability in the next few months when the government revises its 2018 data, he added.

The NRF predicted sales would grow between 3.8% and 4.4% in 2019, to more than $3.8 trillion.

Image: Mall of America, Bloomington, Minnesota. (Flickr)
Tags: Commerce Department, holiday sales, Jack Kleinhenz, Matthew Shay, National Retail Federation, NRF, Rapaport News
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