National Retail Federation

Consumers remain resilient economic force  as long as they continue to spend

Households continue to do their part to keep the economy growing despite global crosswinds and a stronger dollar that restrained economic activity this summer. Though restrained, consumer spending is strengthening and the drop in energy prices is freeing up cash in consumers’ wallets to spend on big ticket-items and other goods and services. This bodes well for the ever-important upcoming holiday season.

Retail sales have been softer than expected recently, perhaps impacted by increased volatility in financial markets. But the most recent rebound in consumer sentiment suggests consumers are feeling more optimistic about current conditions and have favorable expectations about the near term.

Housing has been a bright spot in the in the economy and continues to be a positive force. Solid job growth, improving consumer confidence and still-low home mortgage rates are all propelling the housing market. This is a good sign since newly purchased homes need to be outfitted with retail products.

Inflation was modestly stronger in September, but it has been difficult to pass on higher prices as consumers remain price sensitive. Most of inflation increases have come in the services sector.

More drama could come this winter if Congress does not move quickly to complete work on the federal budget and debt ceiling. Continued debate would fall in the middle of the holiday season. If the issue amplifies on Capitol Hill, we could see a shift in consumer spending intentions.

Download this month’s report, which includes the following highlights:

  • Retail sales and holiday sales forecast
  • Job growth
  • Consumer prices
  • Gross Domestic Product
  • Job openings
  • Housing market index
  • Personal income and spending


While the fundamental forces of shopping behavior are economic — including income levels, credit, wealth, job prospects and confidence — there’s another force that has a tremendous impact on how, when, where and even why people shop: technology.

With well over 30 million smartphones and tablets in the country, it is easier than ever for consumers to find ways to connect with their favorite brands and service providers.

One of the barometers of consumer expectations around technology spending is produced monthly by the Consumer Electronics Association. The CEA Index of Consumer Technology Expectations is a forward-looking indicator derived from a monthly survey that provides users valuable information about the purchase of consumer electronics over the ensuing months.

With the 2015 holiday season just around the corner, I’m already assessing what the trends will be around spending on new iPhones, tablets and other electronics. My colleague Shawn DuBravac, chief economist at the CEA, noted recent readings of their index indicate a steady pace of spending in the near future.

NRF’s holiday forecast comes in early October and like we do every season, we’ll be keeping a close eye on spending in this area.

This month’s full report includes these highlights:

Retail Sales

August retail sales, excluding autos, gas and restaurants, advanced 0.2 percent from July and are up 2.6 percent on a year-over-year basis.

Consumer Sentiment

The University of Michigan consumer sentiment index dropped 6 points to 85.7 in September.

Consumer Prices

The August headline consumer price index decreased 0.1 percent following a 0.1 percent gain in July and a 0.3 percent increase in June.

Gross Domestic Product

The second estimate of second quarter GDP surged to 3.7 percent following the initial estimate of 2.3 percent.


The National Association of Home Builders Index of Builder Sentiment rose to 62 in September, gaining 1 point from the previous month.


Private sector payrolls increased by 140,000 in August. Overall employment(public and private sectors combined) increased by 173,000 in August.

Retail Jobs and Openings

Employment in August, excluding automobiles, gas stations and restaurants, increased 6,700 to 12.87 million jobs seasonally adjusted, a gain of 202,000 from August 2014 employment.

Personal Income and Spending

Personal income increased 0.4 percent in July while personal spending increased 0.3 percent.

Leading Economic Index

The Conference Board’s Leading Economic Index increased by 0.1 percent in August and is 4.0 percent higher than August 2014.