The holiday shopping season is officially in progress, but forecasting is still a bit of a gamble. Ahead of toy industry Q3 earning season this month, the proverbial Magic 8 Ball says “reply hazy, try again” when it comes to the rest of the year. National Retail Federation’s (NRF) Chief Economist Jack Kleinhenz likens it to attempting to put together a puzzle without all the pieces.
“Completing a puzzle is highly probable given patience, having all the pieces and having the picture on the box to guide assembly,” says Kleinhenz. “But it’s not the same when attempting to fit pieces of the economy together in today’s environment. Many of the pieces are missing.”
The statements come from the October edition of the NRF Monthly Economic Review, which presents a mixed bag of economic recovery impacted by the $1,200 stimulus checks, high unemployment numbers, and the rather ominous opinion that “a full economic recovery is not likely before 2022.”
“We are waiting for new data and are still assembling puzzle pieces for the 2020 holiday season,” Kleinhenz says. “I am cautiously optimistic about the fourth quarter in terms of the economy and consumer spending, but the outlook is clouded with uncertainty pivoting on COVID-19 infection rates. The recession appears to be behind us and the re-opening of the economy over the past several months has created momentum that should carry through the fourth quarter. The test is whether consumer spending will be sustained amid wildcard puzzle pieces including policy surprises, the election, and a resurgent virus.”
The NRF recently launched its “New Holiday Traditions” campaign, which encourages families to shop early this season. Last month, the NRF’s Global Port Tracker showed encouraging data regarding increased volume for retail imports heading into the fall.