U.S. Consumers Are Keeping Their Wallets Closed
“We’re going to see a more subdued spending mood from consumers, but what counts is that we’re on track to have a better holiday sales season than last year,” said Michael Niemira, vice president of research and chief economist for the International Council of Shopping Centers.
Despite recent warnings that limited jobs gains have not been significant enough to sustain higher level of spending for most Americans, the firm forecast that Americans may shop slightly more during the important November through December holiday season, with revenue expected to increase 3.4 percent. Last year, that figure rose just 3 percent. This prediction is especially important for the beleaguered retail sector, and the economy as a whole, especially since the second largest shopping season of the year — the back-to-school period — saw weak sales.
For the past four months, the American consumer has been the focal point of analysis. The United States is now four years into the economic recovery, but most evidence suggests that Americans are still keeping their wallets closed. “Nothing looms larger than the health of the consumer in a second-half pickup,” economists at Citigroup wrote in the middle of August. Many economists had expected that consumer spending would strengthen in the second half of this year as the effects of the January payroll tax increase wore off. But for now, consumption is still “limited by really sluggish income growth and no desire on the consumers’ part to borrow,” BNP Paribas economist Yelena Shulyatyeva told the Wall Street Journal.