Record US holiday season retail sales during the last two months of 2020 reflected the recovering economy but also got a boost from consumer emotions after a stressful year, according to National Retail Federation (NRF) chief economist Jack Kleinhenz, who recently said there was a ‘push and pull’ between holiday excitement and worries over a resurgence in COVID-19 cases.
Kleinhenz’s remarks came in the February issue of NRF’s Monthly Economic Review, which said 2020’s $789.4 billion in holiday spending during November and December was the highest on record despite the coronavirus pandemic.
But consumers’ ability to spend was boosted by government stimulus checks received earlier in the year and money saved by not traveling, dining out or attending entertainment events, NRF said in a press release.
Rising home values and stock prices also provided support for holiday spending while the availability of COVID-19 vaccines helped ease worries over the virus and state restrictions on activity. Nonetheless, millions of Americans remained out of work and others were working fewer hours, NRF said.
“Household emotions likely played into holiday economic decisions as consumers wanting to offset the anxiety and stress experienced during 2020 spent on gifts to enjoy a better-than-normal holiday,” Kleinhenz said. “This was clearly a year when animal spirits outweighed conventional wisdom.”
The season’s 8.3 per cent growth over the same period a year earlier was the highest holiday growth rate in records going back to 2002—beating since 6.8 per cent in 2004—and more than double the 3.5 per cent average of the previous five years, including 2019’s 4 per cent gain.
The results easily exceeded NRF’s holiday forecast, which cited economic indicators such as growing employment and wages to predict that holiday sales would increase between 3.6 percent and 5.2 percent over 2019 to between $755.3 billion and $766.7 billion. The numbers exclude automobile dealers, gasoline stations and restaurants to focus on core retail.
