Consumers exhibited confidence during October 2013 the old-fashioned way – they spent some money. According to the National Retail Federation, spending was up month-over-month and year-over-year, just in time for retail’s favorite time of the year.
Retail spending picked up 0.2% (excluding automobiles, gas stations and restaurants) over September and 4.2% compared to October 2012. And it came despite the jolt to consumer confidence delivered by Congress in the form of shutting down the federal government for more than two weeks.
“Consumer spending is growing as we head into the holiday shopping season and the timing couldn’t be better,” NRF President and CEO Matthew Shay said. “Consumers seem to have found some sense of confidence, driven, in part, by lower gas prices. While positive gains were seen in most retail categories, retailers will continue to rely on heavy promotions to drive traffic and sales this holiday season.”
“We remain optimistic that retailers will experience a healthy holiday season, but we also remain steadfast in our belief that Congress and the administration need to work together on policies that bolster confidence in our economy, spurring capital investment and job growth by business owners large and small,” Shay said. “This is key in order to sustain long term economic recovery that is currently being led by the retail industry.”
Added NRF Chief Economist Jack Kleinhenz, “The ever-resilient consumer continues to deliver better economic news. Various retail segments contributed to this month’s growth showing that there is an ongoing pent-up demand by consumers. Confidence and sales should continue to improve. As the holiday season draws closer and closer, NRF remains confident in a good holiday shopping and sales season, which will be in line with our forecast.”
From NRF, here are the highlights of its most recent report:
* Building material and garden equipment and supplies dealers stores’ sales decreased 1.9 percent seasonally-adjusted yet increased 4.7 percent unadjusted year-over-year.
* Clothing and clothing accessories stores’ sales increased 1.4 percent seasonally-adjusted month-to-month and 4.7 percent unadjusted year-over-year.
* Electronics and appliance stores’ sales increased 1.4 percent seasonally-adjusted month-to-month and 5.6 percent unadjusted year-over-year.
* Furniture and home furnishing stores’ sales increased 1.0 percent seasonally-adjusted month-to-month and 8.2 percent unadjusted year-over-year.
* General merchandise stores’ sales increased 0.2 percent seasonally-adjusted month-to-month and 1.4 percent unadjusted year-over-year.
* Health and personal care stores’ sales increased 0.5 percent seasonally-adjusted month-to-month and 5.9 percent unadjusted year-over-year.
* Nonstore retailers’ sales increased 0.4 percent seasonally-adjusted month-to-month and 8.1 percent unadjusted year-over-year.
* Sporting goods, hobby, book and music stores’ sales increased 1.6 percent seasonally-adjusted month-to-month and 5.4 percent unadjusted year-over-year.
RBR-TVBR observation: This is the most roundly-optimistic forecast we’ve seen during the last couple of weeks – and it’s the first to quantify an increase in spending during the month in which the shutdown actually took place.
We note that once again the call is made for Washington insiders to get their act together and avoid doing unnecessary damage to the economy via brinksmanship and gridlock. We hope they will take this advice to heart.