Retailers Anticipating Solid Holiday Sales

Friday's reasonably good jobs numbers also probably point to a good retail sales season for the holidays.

Besides an almost certain interest rate increase, Friday’s reasonably good jobs numbers also probably point to a good retail sales season for the holidays, though indirectly. Retailers hired a total of 394,100 seasonal workers in November (that’s an absolute number, not seasonally adjusted), which is lower than last year during the same month, when the total was 414,300. But seasonal hiring this October was actually more robust than last: 210,400 new positions in 2015, compared with 185,700 in 2014. So when hiring in October and November are combined—and that’s the bulk of the seasonal upsurge in hiring—the total is a bit more than 600,000 each year. Retailers are anticipating a fairly good sales season, in other words.

Another positive bit of data from the November jobs report for retailers was an increase in wages. In November, according to the BLS, average hourly earnings for all employees on private payrolls rose by 4 cents to $25.25, following a 9-cent gain in October. Year-over-year, average hourly earnings have risen by 2.3 percent, which is at least ahead of the anemic rate of inflation (generally below 2 percent in recent years). It’s possible that some of the rise will be used to buy things, though not absolutely guaranteed. After all, during the immediate post-recession years, consumers in the aggregate spent a good bit of their discretionary income paying down debt, especially of the revolving kind.

Another possible boost to consumer spending is the recent timely drop in the price of gas, which allows people to spend money on other things. As of this weekend, the average price of gas nationwide stood at $2.037 for a gallon of regular, down from a month ago, when it was $2.222. A year ago, gas cost an average of $2.692 a gallon. For the recent Thanksgiving holiday weekend, the price of gas was as low as it’s been since the same holiday in 2008 (when the price was collapsing because of the economic panic going on at the time). Prices usually go down as the peak demand of the warm months wears off, but even so prices have been lower this year on average than any time since before the recession.

Later this week, the government will release retail sales numbers for November, which will be seasonally adjusted, but nevertheless reflect the direction of holiday sales season is taking. The consensus among economists is that retail sales will have gained 0.3 percent in November from October, when they were up only 0.1 percent for the month. Also, core-retail sales, which factor out car and gas sales, are expected to have increased 0.5 percent month-over-month in November.