Holiday spending expected to rise 4.1 percent this year

Associated Press

NEW YORK

Americans are expected to spend at the highest rate in three years during what’s traditionally the busiest shopping season of the year, according to the nation’s largest retail-industry trade group.

But the spending trends that have become prevalent in the years since the Great Recession are expected to continue into the winter holiday shopping season: Industry watchers say shoppers will spend only if there are big discounts. And there will be a huge divide in spending between the haves and have-nots.

“It goes without saying there still remains some uneasiness and anxiety among consumers when it comes to their purchase decisions,” said Matthew Shay, president and CEO of the National Retail Federation.

Overall, the National Retail Federation said Tuesday that it expects sales during the November and December period to be up 4.1 percent to $616.9 billion, up a percentage point higher than last year. It marks the highest increase since 2011 when the rise was 4.8 percent.

The prediction is an indicator for stores that rely on the last two months of the year, which on average account for nearly 20 percent of annual retail-industry sales. The figure also provides some insight into the mindset of consumers, which is important since consumer spending accounts for up to 70 percent of economic activity.

There has been some positive economic news lately that suggests Americans are ready to spend. A surge in hiring last month helped push down the nation’s unemployment rate to a six-year low of 5.9 percent, within short distance of the 5.5 percent that economists believe signals a healthy economy. And the stock market is up 6 percent since the beginning of the year, trading at nearly all-time highs.

But wages aren’t rising. Meanwhile, the housing market has seen a slowdown partly because investors are pulling away because of higher prices. And many would-be buyers are unable to obtain a mortgage, particularly first-time buyers, because of tight credit.