We are quickly approaching Black Friday, but will it live up to the hype? Retailers and consumers are preparing for an influx of sales, and Wall Street anxiously awaits the results. The National Retail Federation is estimating that over 165 million people will be shopping during the five-day Thanksgiving weekend. While increased traffic is good, the real question is: Do those five days really make or break the retail sector?
Projections from many news sources are suggesting that Black Friday spending in 2019 will be above the 2018 level, which is good news for many in the US economy. However, at ITR Economics, we know that one data point does not make a trend. To gauge the health of the situation, it is important to use history to help put things in perspective; a five-day period, or even one month, is not going to be the defining moment for retailers or consumers. Look to the big picture.
So, what should you expect? For the past three years, Retail Sales in November averaged 3.8% higher than October. This is stronger than the historical norm, and growth between 1.0% and 2.6% would be more likely. The majority of the US economy is on the back side of the business cycle and will stay there during the first half of 2020. Expect Retail Sales to vacillate around this rate of growth into the first half of 2020. A key takeaway: Retail Sales will not contract during 2019 or 2020. Continue watching via our ITR Trends Report™ as this trend develops further.
Director of Economics