The 2016 Holiday Retail Report
Groundhog Day for U.S. Retailers
First there was Brexit, followed by the Chicago Cubs, then president-elect Trump. Sadly, in this year of upsets and unexpected outcomes, the U.S. retail sector has given us more of the same mediocrity and few surprises. During 2016, the long-awaited revival of vibrant consumer spending has failed again to materialize, and in this sixth year of a sluggish retail recovery, it’s fair to ask whether this anticipated moment will ever arrive — or at least before the next recession is on our doorstep. Retail sales growth remains stubbornly substandard despite the best efforts of merchants to win over shoppers.
The condition of the U.S. economy has been trending favorably since 2014, and the personal finances of most Americans are considerably better than our president-elect would have us believe. But you wouldn’t necessarily infer that from consumer spending levels of the past year or so, which remain uninspired at best.
For those who are wary of attributing significance or validity to headline economic readings, consumers themselves continue to say they are fairly upbeat on the economy, as well as their personal finances.
The two foremost indexes of consumer confidence are sending that message, with the Conference Board’s Consumer Confidence Index recently at its best level since 2007 and the University of Michigan’s Index of Consumer Sentiment slightly below its post-recession high. Both indexes currently are at levels above their 20-year average. Respondents are reasonably sanguine in their outlook for the broad economy, as well as their personal financial prospects. However, they do continue to exercise uncharacteristic restraint compared with their free-spending ways of the past.
So contrary to the impression we’ve heard repeatedly in some circles during this political season, most Americans are not feeling downcast or gloomy on economic matters (nor are they giddy).