Dreaming of a Green Christmas
This time of year there is a great deal of attention placed on holiday sales. For many retailers, strong holiday sales can be a make-or-break proposition for them. But it is bigger than that. Personal consumption expenditures ― the stuff you and I buy ― account for roughly 70 percent of the total economic activity in the country, so a strong holiday season has a real impact on our national economic health.
The past few years have been tough. High unemployment and lowered home values had their impact on consumer spending. We seem to be turning a corner on these issues ― home values are rising again and the unemployment rate is finally declining ― and forecasters are calling for a strong holiday sales season. The National Retail Federation is expecting an increase in sales of 4.1 percent this season compared to last year.
Our economic forecast examines the local economy by quarters, so we do not project retail sales for the holiday season per se, but we do project retail sales by quarter. The Kansas City regional forecast calls for an annual rate increase of 4 percent between fourth quarter 2011 and fourth quarter 2012. To put it in perspective, that 4 percent increase translates into an increase in sales of $1 billion over the course of a year, or an additional $500 in retail sales for every person in the Kansas City metro.
So just remember, when you head out in the wee hours of Black Friday morning and wait in incredibly long lines to make your purchases, it won’t just be your friends and family that will appreciate your efforts, the economy will as well. So go make those cash registers ring!