In the weeks between Thanksgiving and Christmas last year, U.S. consumers shelled out a record $850 billion at stores—both brick-and-mortar and online. After factoring in 2019’s continued income gains and an economy that’s averaged 167,000 new jobs every month (despite economists’ contentions that we were already at “full employment”), we expect a reasonably good and possibly record-setting holiday shopping season. In fact, early estimates show an American consumer projected to spend a chart-topping $1 trillion over the next month or so.
Some may see record spending as profligate or irrationally exuberant, but it’s actually more akin to a reward for exercising good savings habits. With markets hitting more records this week, we’ve been hearing people asking just when the “buying money” is going to dry up. You might be surprised to learn that the U.S. consumer has been saving up for quite some time now.
When you look at the level of savings relative to household disposable income, the numbers have been consistently above average over the trailing 10 years. That means there’s still quite a bit of cash in household accounts ready to either spend on stocks or holiday gifts… or both.
This is not the ‘00s, when savings dipped well below the prior-decade averages; this decade’s been a whole new ballgame. And while we can’t say if we’re in the seventh inning or the top of the ninth, we can tell you there’s still plenty of cash sloshing around the U.S. economy, which bodes well for the holiday shopping season.
This material is distributed for informational purposes only. The investment ideas and opinions contained herein should not be viewed as recommendations or personal investment advice or considered an offer to buy or sell specific securities. Our statements and opinions are subject to change at any time, without notice and should be considered only as part of a diversified portfolio. Mutual funds and exchange-traded funds mentioned herein are not necessarily held in client portfolios. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed.
You may request a free copy of the firm’s Form ADV Part 2A, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged.
Past performance is not an indication of future returns. We do not provide legal or tax advice, nor sell insurance products. Tax, legal and insurance information contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice, or as advice on whether to buy or surrender any insurance products. Always consult an attorney or tax professional, or licensed insurance professional regarding your specific legal or tax situation, or insurance needs.