Buyers Primed for Holiday Shopping Spree - Adviser Investments

Buyers Primed for Holiday Shopping Spree

December 2, 2019

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.

Sources: U.S. Bureau of Economic Activity, Adviser Investments.

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.


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