Are consumers ready to spend again?
Black Friday is coming, with expectations of door-buster deals and madhouse rushes. Last year 141 million consumers visited stores and websites between Thanksgiving Day and the following Monday evening, spending a total over $57 billion. That was down 3% from the year before—a fact that worried retailers at the time—but it turned out to be due to the shortened holiday season. Total holiday sales actually increased by 4%.
What’s in store this year? Sales are expected to rise another 4%, driven by employment growth and rising consumer confidence. The recent fall in gas prices won’t hurt, either. And consumer credit is expanding. Including mortgage debt, consumer balance sheets began to grow the middle of 2013.
Because of low interest rates, debt service relative to income is lower than it’s been for decades.
So finish the pumpkin pie and warm up the car. Never mind forecasts of bad weather: when the going gets tough, the tough go shopping!
Douglas R. Tengdin, CFA
Chief Investment Officer
Leave a comment if you have any questions—I read them all!