The retail industry is a sector of the economy that involves individuals and companies engaged in the selling of goods and services to consumers. The outlook for retail sales in a given year has a great deal to do with the financial resources of the average U.S. citizen. Consumer spending accounts for roughly two-thirds of our annual gross domestic product (GDP).1 Currently, in the U.S., we are experiencing cheaper fuel prices, rebounding stock prices and job gains on pace for their strongest year since 1999.2 This, in turn, may provide consumers with more disposable income to spend on one of the great American pastimes, shopping.
» Total U.S. retail sales grew to $4.53 trillion in 2013 up 4.2% from 20123, outpacing GDP growth of only 2.2%4. In addition, retail accounted for 27.0% of nominal U.S. GDP, up from 26.8% in 2012. That share has been on the rise consistently since a drop-off in 2009, when consumer confidence was at a low after the recession.5 Consumer confidence closed October 2014 at its highest level (94.48) since October 2007 (95.24), as measured by the Conference Board’s Consumer Confidence Index.
» The Bureau of Economic Analysis reported that wages and salaries, which tend to drive consumer spending, increased 5.1% in September 2014 from the year-earlier level.6
» Declining gasoline prices, as the U.S. is currently experiencing, tend to boost real consumer income more than most other price declines. Therefore, more money is available to spend on other things.7
» Online holiday sales in November and December 2014 are anticipated to increase by 13% to an all-time-best $89 billion. It is estimated that 3.4 million consumers will buy online for the first time this holiday season.8
(Source: First Trust)