Vacation spending by U.S. consumers increased by $ 2.5 trillion in savings

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“There are several factors that combine to have a major impact on the vacation outlook, but household fundamentals are a bright spot in the uncertain present,” Kleinhenz said. “Consumers are in a very favorable position at the start of the last few months of the year and spend because they can.”

Kleinhenz’s remarks came in the November issue of the NRF Monthly economic review, which expanded on the reasoning behind NRF’s forecast last week that 2021 holiday retail sales in November and December will increase between 8.5% and 10.5% from 2020 for a total of 843 , 4 and 859 billion dollars.

An estimated $ 2.5 trillion “savings buffer” accumulated by consumers who largely stayed at home rather than dining out or traveling during the pandemic has “supercharged” spending. Meanwhile, incomes are rising in the form of more jobs, more hours and higher wages reflecting business competition for workers during the current labor shortage. Household wealth hit a new record in the second quarter (latest data available) and boosted consumer confidence.

Kleinhenz said strong income growth and “accumulated savings” should help spending weather inflation that has been driven by both consumer demand and supply chain disruptions. The challenge when – and if – sales start to decline will be whether the decline is caused by lower demand or reduced product availability.

Kleinhenz said higher gasoline prices and higher energy costs for home heating would divert some of the money that might otherwise go to retail sales, especially with meteorologists saying a La Niña model will likely bring cold weather this winter. Nonetheless, a La Niña has coincided with stronger retail sales in the past.


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