- As multiple reports predict a rise in 2021 holiday sales, the National Retail Federation said this year's holiday sales might exceed its initial growth projections of between 8.5% and 10.5%. This year's holiday sales may rise as high as 11.5% year over year, the organization said on Friday.
- This year, consumers' disposable personal income has increased by 4.1%, and spending has gone up by 12%, according to the NRF.
- The NRF's Chief Economist Jack Kleinhenz said that it's unclear how the COVID-19 omicron variant will impact the economy, but it is "the latest wildcard raising uncertainty around the economic outlook."
One thing remains clear from the NRF's revised estimate and other reports predicting 2021 holiday sales: The COVID-19 pandemic has made it difficult for experts forecast just how the health crisis will impact the U.S. economy. While the initial NRF estimate placed sales growth at up to 10.5%, reports from Deloitte and others projected a wide range of holiday sales and spending growth. Meanwhile, early holiday shopping promotions may have accounted for the dip in Thanksgiving weekend sales.
"Consumers and retailers have both revised their playbooks and broken with previous traditions," Kleinhenz said in a statement. "With the momentum we've seen so far likely to continue, it seems probable that we will exceed our initial projection."
The organization cited the University of Michigan's Index of Consumer Sentiment, which dropped to the lowest in a decade at 67.4 in November, yet Kleinhenz said spending data is a more relevant measure of consumer behavior.
The coronavirus pandemic has been especially hard on middle- and lower-income consumers, and uncertainty has remained amid a climate of cautious optimism. Echoing the University of Michigan's findings, a survey released in October from Alvarez & Marsal's Consumer Retail Group found that 57% of respondents anticipate having the same amount or less money over the next six months and 58% said they expected their families to have the same or less money in the same period.
Still, the omicron variant presents another challenge for consumers' health and economic outlook. Moderna CEO Stephane Bancel said in an interview with CNBC that scientists will likely take a couple of weeks to determine how well current coronavirus vaccines protect against the new variant. Per Centers for Disease Control and Prevention figures as of Dec. 3, nearly 60% of the U.S. population is fully vaccinated, and less than a fourth have received booster shots.