Holiday retail sales are projected to jump upwards of five percent this holiday season, while e-commerce holiday sales are expected to increase 14-18 percent compared to 2018 — illustrating that recession fears have not necessarily taken root.
If the projections are correct, holiday sales from November to January will surpass $1.1 trillion, with e-commerce holiday sales totaling upwards of $149 billion.
The bullish projections come from Deloitte’s annual holiday retail forecast and seem to underscore that many Americans are not worried that a recession is around the corner.
Thank the Labor Market
Deloitte points to the current state of the labor market to explain why holiday sales are set to make retailers happy. The audit, consulting, tax and advisory services company’s U.S. economic forecaster, Daniel Bachman, explains:
“The projected holiday season growth is, in part, due to the current health of the labor market. Near record-low unemployment rates, coupled with continued monthly job creation, may encourage people to spend more during the holiday season. The economy is still growing, albeit at a slower rate. Additionally, we continue to see consumer confidence elevated, which also helps boost holiday spending.”
Will This Be the Last Major Holiday Spend Before a Recession?
Indeed, the job market in the United States is incredibly healthy — so healthy, in fact, that some new hires are reportedly flaking on their new employers before even showing up for their first days of work, thanks to the wealth of employment opportunities currently present. Unemployment rates in the U.S. haven’t been this low since around the time Americans landed on the moon.
However, bottomed-out unemployment rates have often been a leading indicator for predicting a recession. Many economists have taken the latest jobs report, skyrocketing national debt, decreasing interest rates, and sentiment that little-to-nothing was actually fixed post-2008 to indicate that an unprecedented recession is almost certainly in the cards. NorthmanTrader founder and lead market strategist Sven Henrich recently stated:
“We’ve never faced a recession with so much debt and so little Fed ammunition available. With negative rates still in effect in many places, there’s no playbook for this. Historical data will be of little use.”
If an economic downturn is indeed on the way, this could be the last holiday season we see consumers spending in such large amounts.
It is also worth noting that last year’s holiday sales came in lower than expected — primarily due to the U.S. government shutdown and a fairly-harsh stock market shakeout.