Wendy future of retail top

Consumers bullish as holidays near

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NEW YORK — With the nation’s economy growing at a solid pace and gasoline prices declining, there is growing sentiment among economists that consumer spending is going to pick up momentum.

The signs of a strengthening economy — as indicated in recent government reports — and increased consumer confidence come at an important time, with retailers heading into the critical holiday shopping season.

One report from the Commerce Department showed that gross domestic product, or the measure of goods and services produced across the nation, rose at a 3.5% rate in the third quarter. After taking into consideration a similarly strong GDP report from the second quarter, some economists were calling the April-October period “the strongest six-month interval” for economic growth in the past 10 years.

The Commerce Department also reported in mid-November that ­retail sales rebounded to a 0.3% increase in October overall and, excluding gas stations, the increase was a more robust 0.5%.

On the employment front, the Labor Department reported earlier this month that employers added 214,000 jobs in October, resulting in a drop in the unemployment rate to 5.8%, another sign that the economy has momentum. This is longest stretch of job growth in the U.S. labor market since World War II.

National Retail Federation chief economist Jack Kleinhenz said the recent upbeat employment report is one of the factors indicating “that the economy is on firmer turf heading into the all-important holiday shopping season.” NRF expects the job growth should provide “a corresponding lift in business activity and consumer spending.”

The one cloud over the employment market, according to economists, is the ongoing stagnation in wages. According to the recent Labor Department report, wages are rising just barely ahead of the rate of inflation.

According to data compiled for The Conference Board, U.S. households are expected to spend an average of $538 on gifts during the holiday shopping season, up slightly from last year’s average of $528.

“The recent improvements in consumer confidence, along with robust job growth and declines in gas prices, have consumers approaching the holiday season in better spirits than last year,” said Lynn Franco, director of economic indicators at The Conference Board. “However, despite the improved holiday cheer, consumers will once again seek out bargains and incentives when making their purchases.”


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