High household savings rates and progress in the fight against COVID should keep consumers spending.
The National Retail Federation has predicted U.S. retail sales could grow as much as 11 percent year-over-year this holiday season, potentially topping $850 billion and setting a new record.
It’s a bullish but not surprising forecast given how retail—including fine jewelry—has been performing since May 2020, when the country first began to emerge from the initial COVID-19 lockdown.
According to the NRF, retail sales have grown every month since May 2020 and ended the year up 7 percent over 2019.
That momentum has continued in 2021, with retail sales up 14.5 percent through the first nine months of the year.
On a conference call with reporters [during the week of October 25], NRF President and CEO Matthew Shay and Chief Economist Jack Kleinhenz said government stimulus checks, more certainty about the handling of the pandemic, and progress in vaccinations (as of press time, the percentage of U.S. adults who are fully vaccinated was nearing 60 percent) have fueled retail sales in 2021.
Government stimulus programs have helped households pay down debt and grow savings, giving them more disposable income, a stark contrast to the years leading into the Great Recession when U.S. savings hit an all-time low.
Kleinhenz said falling COVID cases, the authorization of booster shots, and development of a vaccine for children ages 5 to 11 also will have U.S. consumers feeling more mobile this holiday season.
In addition, the U.S.’s ban on international travelers is set to lift Nov. 8, which should give an added “jolt” to retail sales of goods, Shay noted.