Although it’s too early to start making predictions about the likelihood of a white Christmas in 2007, the nation’s retailers can look forward to a green Christmas this year, as holiday shoppers will be hitting stores and Web sites armed with larger sums of disposable income than ever before.
That’s the word from Western Carolina University economist James F. Smith, the only person named by the Wall Street Journal three times as the “most accurate forecaster” and recognized by Bloomberg News in January 2006 for having the most accurate forecast for long-term interest rates among a national forecasting panel.
“With all the overdone bad news on housing ringing about their ears, which is so different from their personal experiences, American consumers are ready and able to forget all the doom and gloom being bandied about and do what American consumers always do to feel better – go shopping,” said Smith. “While CNN is predictably enough already out with a ‘Bah! Humbug!’ story, the truth is that both regular and non-store retailers, including catalogs and the Internet, will ring up new records in November and December this year.”
All the fundamentals are in place, he said. “There are more people employed now than ever before in U.S. history and they are earning more money than ever before, even after their record tax payments that are rapidly reducing the federal budget deficit,” Smith said.
In addition, Smith points to U.S. consumers’ record net worth of $57.9 trillion as of June 30, according to the “Flow of Funds” release of Sept. 17 from the board of governors of the Federal Reserve System. That’s more than four times the value of all the goods and services produced in the United States, he said. The total gross domestic product was running at a seasonally adjusted annual rate of $13.8 trillion in the second quarter of 2007, according to a Sept. 27 release from the Bureau of Economic Analysis.
Smith also said that per capita personal income after taxes was a record $33,525 in the second quarter, according to a BEA release of Sept. 28. “That’s an increase of 4.9 percent from the second quarter of 2006,” he said. “And that’s more than enough to buy the goods and services that will light up the eyes of all the key people in each shopper’s life.”
For additional signs of the shopping times, Smith said that retail and food services sales for the first nine months of 2007 were $3.3 trillion, an increase of 3.9 percent from the same period in 2006; and that non-store retailers tallied $209.8 billion for the first nine months of 2007, an increase of 8.9 percent.
“So, get out there and shop or use your fingers on the keyboard,” he said. “The best advice is to shop early for the widest selection. And remember that gift certificates are always highly prized by high school and college students. Happy shopping.”
Western Carolina University is one of the 16 senior institutions of the University of North Carolina system. Western enrolls 9,056 students in undergraduate and graduate programs of study, and is located about 50 miles west of Asheville, N.C., near Great Smoky Mountains National Park.