The National Retail Federation (NRF) of the US announced its forecast of holiday season (over November and December) 2018 retail sales recently. The organisation expects retail sales — excluding automobiles, gasoline and restaurants — to increase between 4.3 and 4.8 per cent over 2017 in the period, rising to between US$ 717.45 billion to US$ 720.89 billion.

The organisation said this forecast compares with an average annual increase of 3.9 per cent over the past five years.

In 2017, holiday sales stood at US$ 687.87 billion, which had marked a 5.3 per cent increase over the year before; and the largest increase since the 5.2 per cent year-on-year gain seen in 2010 after the end of the Great Recession, NRF noted.

“Our forecast reflects the overall strength of the industry,” NRF President and CEO Matthew Shay said. “Thanks to a healthy economy and strong consumer confidence, we believe that this holiday season will continue to reflect the growth we’ve seen over the past year. While there is concern about the impacts of an escalating trade war, we are optimistic that the pace of economic activity will continue to increase through the end of the year.”

NRF Chief Economist Jack Kleinhenz commented: “Last year’s strong results were thanks to growing wages, stronger employment and higher confidence, complemented by anticipation of tax cuts that led consumers to spend more than expected. With this year’s forecast, we continue to see strong momentum from consumers as they do the heavy lifting in supporting our economy. The combination of increased job creation, improved wages, tamed inflation and an increase in net worth all provide the capacity and the confidence to spend.”

NRF’s forecast for the holiday season is in line  with its  forecast for  annual retail sales for 2018, which the organisation had predicted will increase by at least 4.5 per cent over 2017.

“NRF’s holiday forecast is based on an economic model using several indicators including consumer credit, disposable personal income and previous monthly retail sales,” the organisation elaborated. “The number includes online and other non-store sales.” 

The organisation also made a forecast on rise in seasonal employment, which, it said, would grow between 585,000 and 650,000.

“Even with the increasingly tight labour market, retailers have been preparing for their busiest season of the year by hiring extra staff to help meet the demand expected during November and December,” NRF elaborated. “As part of its forecast, NRF expects retailers to hire between 585,000 and 650,000 temporary workers this holiday season, up from last year’s 582,500.”