I hope everyone had a great holiday weekend!
If not, don’t worry – there’s another one in 4 days as it’s already Tuesday and no one is going to take this week seriously anyway. Christmas spending is expected to hit $1.1Tn this year, that’s 18.3% out of $6Tn of total consumer spending for the year – have you ever considered that America has such a strong economy BECAUSE of all these holidays that encourage spending?
Of course it’s not just America, families worldwide are expected to spend 156% of their monthly income during the Christmas holiday in 2023 with US shoppers predicted to spend an average of $1,652 each – jumping back over pre-Covid levels with a bang:
| Year | Average holiday spends | Change in holiday spending |
|---|---|---|
| 2023 | $1,652 | +14% YOY |
| 2022 | $1,455 | No change |
| 2021 | $1,463 | +5% YOY |
| 2020 | $1,387 | -7% YOY |
| 2019 | $1,496 | – |
Source: Deloitte.
Retail therapy is our national pastime. It’s not just about buying what you need anymore. It’s about buying what you didn’t know you needed until you saw it on sale. This year, 95% of consumers planned to shop for the holiday season. That’s not just a statistic; that’s a cultural movement! And where is this shopping spree happening? Everywhere. But the online market is where the real action has been, with sales expected to jump between 7% and 9% to a staggering $273.7 billion to $278.8 billion.
Retailers haven’t been just sitting back, waiting for the cash to roll in. They’ve been pulling out all the stops with loyalty programs, price match guarantees, and even extending those return windows (because let’s face it, we all make some questionable choices when shopping at 2 AM). It’s a full-on charm offensive to pull every last dollar from our wallets.
It’s not all sunshine and rainbows in the world of retail, however. Consumer sentiment can be a fickle beast… While people are feeling somewhat better than last year, there’s still a cloud of uncertainty hanging over the economy. This uncertainty is leading to a fascinating split in shopping behavior. Some are tightening the purse strings, looking for bargains and value buys. Others? They’re going all out, splurging like there’s no tomorrow. It’s a tale of two wallets, and both are equally important for the retail landscape.
This holiday season is shaping up to be more than just a shopping spree – it’s a complex dance of consumer psychology, economic trends, and even the weather (which has been mild). As the numbers keep rolling in, let’s keep in mind that behind every statistic is a story of people making choices in an ever-changing world.
We’ll keep an eye on the data – analyzing these trends and what they mean for our strategies and investments as we head into 2024 (which even has an extra shopping day). Knowledge isn’t just power; it’s profit – when you know how to analyze it!
As you can see, we have a lot of housing data today along with the Dallas Fed with the Richmond Fed tomorrow along with Business Uncertainty but we’ll be watching the 5-Year Auction and the 7-Year on Thursday and then Chicago PMI on Friday but I’m calling another half-day since no one will be around anyway. Let’s just have fun this week!
Here’s how little is going on this week:
The Dollar bottomed out at 101.429 early this morning and it’s back to 101.70 now so we’ll see what’s going on over there. Ships are moving through the Suez Canal again (with US Navy escorts) and that and low holiday demand have sent Gasoline (/RB) prices plummeting and Oil (/CL) is back to $73.50 after several failed attempts to get back over $75 – where’s the next catalyst for poor Oil?
2024 is off to a good start as, last year, 80% of economists forecast a Recession in 2023 and that never showed up. Now only 1/3 are forecasting a Recession in 2024 and let’s hope they aren’t as completely wrong in 2024 as they were in 2023 or we’re heading into a completely unexpected disaster!
We’ll have to wait a while to see what’s up (or down) in 2024 as we’ve been basing our inflation observations on quarter which accounts for over 1/3 of the year’s retail and EVERYTHING was on sale to attract consumers. Does that mean inflation is over or just on vacation?
The new year will tell…
