EXACTLY HOW IMPORTANT IS HOLIDAY SHOPPING FOR THE U.S. ECONOMY?
We’re all thinking the same thing, “Holiday decorations already? We didn’t even celebrate Thanksgiving yet.” Once the countdown to the holidays hits 50 days, retailers across the United States start preparing for the biggest shopping season of the year. According to the National Retail Federation, holiday shoppers plan to spend 3.8-4.2% more in 2019 than last year. This further contributes to the upward trend of total holiday spending since 2011.
Consumer spending drives much of the US economy. There are countless jobs in production, distribution, and fulfilling goods that are supported by what and how consumers purchase. When people are buying clothes, filling up their tanks, and emptying shelves, the need for replacement increases and so does the production. Recessions occur when economic activity slows down. When consumers don’t spend, production decreases.
So, exactly how important is holiday shopping for the U.S. economy?
- Consumer spending makes up 70% of gross domestic product, with most taking place in November and December.
- According to the National Retail Federation, a fifth of all retail sales occur in the year’s last two months.
- Sales during the holidays make up 30% of a retailers annual revenue from November to December.
- Statistically, the Saturday before Christmas is the biggest shopping day of the season.
- Investors look at Black Friday sales numbers as a way to gauge the overall health of the entire retail industry.
- Around 53% of all holiday shopping is expected to be done digitally this year.
Although retailers are keeping an eye on sales due to the looming trade war with China, Americans are still spending this holiday season. With the help of online shopping, predictions anticipate that sales won’t take too much of a hit. In fact, the biggest sales spike is predicted to happen online, with purchases increasing between 14% and 18% as compared to the same period last year.
Consumers provide a very fundamental strength to the overall economy. As long as people continue to buy, businesses can continue to produce and sell products which ultimately keeps the economy growing at a steady pace.
Want more information on how consumer spending helps the economy? Do you have any projections for spending this holiday season? Reach out to us via email (firstname.lastname@example.org) or through our contact form. We can help you navigate this shift in any market across the globe.