The stock market may be working through one of its most volatile periods in recent history, but Americans are confident in their financial situations, The Wall Street Journal reports. The 2018 holiday season was one of the most profitable for retailers in nearly a decade.
“Total U.S. retail sales, excluding automobiles, rose 5.1% between Nov. 1 and Dec. 24 from a year earlier, according to Mastercard SpendingPulse, which tracks both online and in-store spending with all forms of payment,” WSJ says. “Overall, U.S. consumers spent over $850 billion this holiday season, according to Mastercard.”
More consumers shopped online than ever before — and that’s part of the reason stores did so well. Online spending jumped more than 25%, spurred on by new offers from retailers that allowed customers to skip crowds at the mall by buying their presents online and picking them up at designated kiosks inside stores like Wal-Mart, Target, and Macy’s.
It also helped that retailers like Amazon were able to sell their wares up until the holiday. New shipping policies got packages to consumers faster, and in some cases Amazon even offered free same-day delivery on Christmas Eve.
Other retailers — specifically clothing retailers — are learning from their mistakes, CNBC reports, and delivering more of what customers want, faster.
“Clothing retailers like Lululemon, Abercrombie & Fitch and Old Navy had already kicked off the holiday shopping season on a high note, seeing strong sales during Black Friday weekend. Analysts say companies that sell apparel have done a better job in 2018 managing inventory and keeping product assortments fresh,” the financial watchdog reported.
Apparel spending is taken as good overall economic news, according to Business Insider.
“Strong apparel spending signifies that consumers have confidence in the economy and are prepared to spend money on more frivolous purchases. In times of uncertainty, these are usually items that consumers first cut back on,” BI reports.
“When consumers splash out, it shows that they have money to spare and are confident enough to spend it on products,” a financial analyst interviewed by BI added.
The news isn’t good across the board, however. Department stores are still considered to be on the decline according to The Wall Street Journal. Same-store sales for major big-box retailers and shopping mall anchor stores decreased by about 2% from last year.
This news seems to fly in the face of “expert” economic analysis, which is predicting a slowdown — or even a recession — in 2019, spurred on by a multi-million dollar stock market “correction” that’s been taking place over the last several weeks.
But the Trump administration has consistently relied on the Consumer Confidence Index — and not Wall Street — to measure how Americans feel about their economic stability, and if the White House is following those indicators now, they’re getting good news. In December alone, the Consumer Confidence Index shot up by 1%, a sign that “consumers are shrugging off renewed volatility in financial markets as this year’s optimistic sentiment continued in the final weeks of the holiday season.”