Despite fears of a slowing economy, the trade war and incessant market volatility, you wouldn’t know it with how consumers have been spending. In fact, the 2018 holiday season was the best one in six years.
Total retail sales from November 1 to December 4, 2018 were up 5.1% year over year to $850 billion. Apparel sales were up nearly 8% -- showing the best growth since 2010. Home improvement sales were up 9%. And home furnishings were up 2.3% for the holiday season.
Granted, sales at department sales slipped 1.3% this year, but much of that can be attributed to store closures. Plus, according to Mastercard, department stores have been performing much better online. In fact, department store online sales were up 10.2% this year.
In short, consumer spending is “on fire”. Brick and mortar stores have been crowded. And online retail growth is the best in years.
“Wall Street is running around like a chicken with its head cut off, while Mr. and Mrs. Main Street are happy with their jobs, enjoying their best wage increases in a decade,” said Craig Johnson, president of Customer Growth Partners, as quoted by The Wall Street Journal.
Online spending soared to 19.1% from 18.1% year over year thanks in large part to Amazon.
The online behemoth said it saw record global holiday sales, claiming it shipped a billion products for free in the U.S. alone through its Amazon Prime program.
In fact, according to Amazon’s post-holiday press release:
“Amazon announced a record-breaking holiday season thanks to its customers all around the world, with more items ordered worldwide than ever before. Amazon customers shopped at record levels from a wide selection of products across every department, discovering top holiday gifts and trending products offered at deep discounts and low prices. Some of the best-selling products this season included, all-new Echo Dot, L.O.L. Surprise! Glam Glitter Series Doll, fashion items from Carhartt, and Bose Quiet Comfort Wireless Headphones, among others.”
Such an upbeat tone from the company should help calm fears of a U.S. recession and a potential slowdown in consumer spending.
These numbers reinforce the notion that U.S. consumer demand remains healthy and strong, thanks to rising wages, job growth, and increased consumer confidence.
“Consumer spending remains solid and clearly provides evidence that the economy is healthy as we head into 2019,” notes National Retail Federation (NRF) Chief Economist, Jack Kleinhenz, as quoted by Logistics Management.
In short, despite fears of a slowdown, the economy is just fine, thanks in large part to the U.S. consumer. Stay tuned to The Cheap Investor for more.