U.S. retail sales growth will slow to 4.1 percent during the holiday season this year, hampered by political and fiscal uncertainties and stubborn unemployment, the National Retail Federation said.
The increase to an estimated $586.1 billion in retail sales in November and December compares with a 5.6 percent jump last year and the 10-year average of 3.5 percent, Washington-based NRF said today in a statement. Stores may hire 585,000 to 625,000 seasonal employees, compared with 607,000 last year, the group said.
Retailers are entering their most important season amid a presidential election, gridlock in Washington over the impending fiscal cliff of changes in taxes and government spending, and an unemployment rate stuck at around 8 percent, the trade association said. The projected holiday-sales gain still is a “solid” one, thanks to improved consumer confidence and recovering home prices, NRF President Matthew Shay said.
“All the survey work we have done over the past 90 days has reflected consumer sensitivity to this issue,” Shay, who’s also the organization’s chief executive officer, said in a telephone interview. “More than 60 percent have specifically identified the fiscal cliff and the political conversations that are going on. It is having a significant effect.”
Holiday sales jumped 5.5 percent in 2010 after inching up 0.3 percent in 2009. The NRF uses the Commerce Department’s retail sales figures excluding auto dealers, gasoline and restaurant sales. Consumer spending accounts for about 70 percent of the U.S. economy.
Online sales will rise as much as 12 percent to $96 billion in November and December, the NRF’s shop.org arm also forecast today.
Economic reports have sent conflicting signals in the past week. Yesterday, the Institute for Supply Management reported that manufacturing unexpectedly expanded in September after three months of contraction.
On Sept. 28, the Commerce Department said consumer spending stalled in August after the surge in gasoline prices squeezed Americans’ paychecks. Purchases rose 0.1 percent after adjusting for inflation following a 0.4 percent gain in July.
Confidence among U.S. consumers, meanwhile, climbed in September to a four-month high as Americans became less pessimistic about the outlook for the economy. The Thomson Reuters/University of Michigan final sentiment index rose to 78.3 this month from 74.3 in August, a Sept. 28 report showed.
Macy’s Inc. (M), the second-biggest U.S. department-store chain, said yesterday it is increasing hiring of mostly part- time workers by 2.5 percent to about 80,000 for the holiday season. Kohl’s Corp. (KSS) said Sept. 18 it may hire about 52,700, holiday workers, up more than 10 percent from last year.
Sales at retailers’ stores open at least a year may climb 3 percent in November and December, slower than the 3.3 percent gain last year, the International Council of Shopping Centers said Sept. 25 in a forecast for the more than 25 chains it tracks.
Traffic at stores in November and December may increase 2.8 percent from the same period a year ago, when store visits declined, according to a report released Sept. 12 by ShopperTrak, a Chicago-based consulting firm.
Sales in those two months account for 20 percent to 40 percent of U.S. retailers’ annual revenue, according to the NRF. Jewelers and department stores have been the most dependent on the season for their annual sales, the group has said. Last year’s fourth quarter accounted for 59 percent of Cincinnati- based Macy’s 2011 profit.
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