'Tis the Season to be Shopping
| Economic Indicators |
Another way to predict holiday sales volume is to look at major economic indicators such as unemployment and interest rates. By this measure, holiday sales should be fairly brisk. The Federal Reserve has lowered interest rates three times in the past several weeks, reducing the rates consumers must pay on new car loans and credit card debt. Since sales of new cars make up a large component of overall retail sales, reduced interest rates are likely to spur additional sales, thereby improving the retail picture.
Unemployment remains low, as well, which means that people have money to buy things, so we should therefore be optimistic about holiday sales. However, layoffs have skyrocketed in industries ranging from financial services to petroleum. Because layoffs cause economic uncertainty about the future, consumers who lose their jobs tend to postpone purchases, which would again cloud the sunny picture for holiday sales.