Charisse Jones and Kelly Tyko
Published 12:01 AM EDT Sep 17, 2019
The holidays are around the corner and, despite the looming trade war with China, it looks like Americans may be in a spending mood.
Sales should jump between 4.5% and 5% from November into January, according to consultancy Deloitte, making the projection in its annual holiday retail forecast.
That will amount to more than $1.1 trillion during the retail sector’s most lucrative and important season. In the same time period last year, sales totaled $1.09 trillion, according to the U.S. Census Bureau.
Though most sales continue to happen at physical stores, the biggest sales spike is predicted to happen online, with purchases increasing between 14% and 18% as compared to the same period last year, when e-commerce sales rose by 11.2%.
That could mean retailers bring in between $144 billion and $149 billion from online shopping.
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“Near record-low unemployment rates, coupled with continued monthly job creation, may encourage people to spend more during the holiday season,” said Daniel Bachman, Deloitte’s U.S. economic forecaster, in a statement. “The economy is still growing, albeit at a slower rate.”
Bachman said consumer confidence has been elevated, which can boost holiday spending.
The Trump administration announced Aug. 13 that it would wait until Dec. 15 to impose tariffs on Chinese goods that were supposed to go into effect in September. Many of the items delayed until December are popular holiday gifts.
“We’re doing this for Christmas season, just in case some of the tariffs would have an impact on U.S. customers,” President Donald Trump said in August of the delay. “So far they’ve had virtually none.”
Still, many companies including Macy’s and Home Depot have pared their profit and sales expectations.
“Our forecast is optimistic, despite potential foreboding signs,” said Rod Sides, Deloitte’s vice chairman and retail leader, in a statement to USA TODAY. Scenarios including tariffs and a recession are incorporated in Deloitte’s forecast methodology.
It’s not clear how much of the new tariffs will be passed on to American shoppers and how much can be absorbed by U.S. retailers, but at least a portion is likely to result in higher retail prices.
“The majority of consumers are looking at their checkbook and have not seen an increase in the prices of consumer goods; often if movements are small, they tend to have little impact on consumer spending,” Sides said. “More significant shifts tend to occur when there is a shock to the broader economy.”