Holidays shaping up even better than forecast

The holidays are shaping up even better than forecast as November retail sales surged and prior months were revised upward—raising prospects for a strong consumer spending trend to start to the New Year.

Store channels—primarily home improvement, electronics, and home furnishings stores—shared in the stronger gains, which were led as usual by e-commerce and other nonstore retailers.

November topline sales grew between 5% to 6% in seasonally adjusted and unadjusted terms. That was well above the 4% or better pace forecast for the holiday (see forecast here).

These results exclude auto, fuel, and restaurant sales. Here is more on what the latest government-reported retail numbers say:

  • Monthly trend. Monthly year-to-year growth stepped up from a roughly 4% to 4.5% pace in September-October to grow a seasonally adjusted 5.4% and unadjusted 6% in November (excluding auto, fuel, and restaurant sales).
  • Quarterly trend. The fourth-quarter growth pace is running about 5%, which is well above the growth range of 3% to 4% for the first three quarters of the year.
  • Annual trend. The strong finish to the year is raising the year-to-date results close to last year’s growth rates—and raising the prospects that 2017 might surpass 2016 growth after December results are tallied. As a result, the 4% annual growth forecast by MacroSavvy™ may be achieved.
  • E-commerce vs. in store. E-commerce sales grew an estimated 15% in November, running ahead of the 14% pace forecast by MacroSavvy™. In-store sales are also running ahead of the 2.5% forecast pace as laggards such as clothing, grocery, drug, and mass retail stores posted November gains above that rate of growth.

The stronger holiday sales trend has been supported by the latest signs from consumers’ confidence to spend over the next 90 days. Spending confidence sustained its pickup in November as Millennials and Gen X continue to turn around their spending plans. See more about confidence trends here.

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