Analysts' reports for major retailers might lead to pessimistic projections for holiday sales. U.S. government figures, on the other hand, give economists reason to be hopeful.
Tracking consumer spending is another way to spot trends for holiday sales potential. The U.S. Department of Commerce reports that retail sales overall rose 1% in October, up from an increase of only 0.3% in September. If you compare this number with the analysts finding of 3.6% growth in October sales among major retailers, you might think the economy as a whole had ground to a halt.
That is not the case, however; analysts compare sales at 60 major retailers in October 1998 to sales in October 1997, while the Commerce Department compares retail sales from the economy as a whole in October 1998 to sales in September 1998. A 1% increase from one month to the next is quite healthy, whereas a 3.6% growth from one year to the next represents only moderate growth. So, while analysts' reports for major retailers would lead to pessimistic projections for holiday sales, the U.S. government figures give economists reason to be hopeful.
The Bottom Line
If you're thinking that there's a lot of conflicting information coming out about the economy, you're right. There is a saying that the only way to get a unanimous opinion from a group of economists is to limit group membership to one person. Even then you take your chances; economists are notorious for being unable to arrive at a consensus regarding where we stand at the moment, let alone agree on where the economy is headed. So will the holiday season make retailers' sugarplum dreams come true? It's hard to say. You might be better off consulting the Psychic Friends hotline.