With unemployment at a 50-year low, Creighton University economics professor Ernie Goss, Ph.D., expects overall retail sales to grow by 3-4% this holiday shopping season. Additionally, the e-commerce sector of the retail industry will remain at the top of Santa’s nice list, with Goss forecasting sales to be approximately 14% higher over last year.
Goss, an economist at the Creighton Heider College of Business, conducts two monthly economic surveys across Midwest states that provide leading indicators on the strength of certain sectors of the U.S. economy.
While Goss predicts overall sales to grow this holiday season, he says consumers should take precaution as the outlook is not as jolly as years’ past for a few reasons:
A slowing economy – The GDP growth rate, which measures the pace of economic growth, is at 1.9%. Goss says this is down from last year, signaling slower economic growth. Consumers need to prepare for slower economic growth and somewhat higher unemployment levels in the weeks and months ahead.
Hiring headaches ‒ While unemployment is currently extremely low, it could grow in future months. Retailers looking to ramp up hiring to keep up with the holiday rush could have a harder time getting fully staffed, Goss says. Finding and hiring qualified workers is currently the number one economic issue Goss sees in his data. The hiring crunch has a reverse effect for consumers. Wages are growing slightly, and employers are offering more referral incentives and bonuses to employees for recruitment. This infusion of additional money into the economy will translate to growth in retail sales, Goss adds.
Debt loads – According to the National Retail Federation, holiday shoppers between the ages of 35 and 44 plan to spend the most this year at $1,158.63. While short-term and mortgage interest rates are good, Goss says those low rates do not apply to credit cards, where interest rates are sky-high. Goss recommends consumers not take on more debt and avoid carrying credit card balances this holiday season and beyond. He says debt loads are high right now and points to student loans and interest rates as some of the main culprits to slower retail sales growth.  
Gifting experiences – Gifts of services and experiences such as health club memberships and vacations are an emerging trend that Goss expects to continue, providing competition to traditional gifts like new pajamas and scented candles.
Tariffs and trade tensions – Goss says clothing sales are weakened by ongoing trade tensions and tariffs. The North American Free Trade Agreement passing among the U.S., Mexico and Canada, and a trade deal with the U.S. and China could help the retail clothing industry.
About Creighton University: Creighton University in Omaha, Nebraska, enrolls 4,255 undergraduates and 4,399 graduate and professional students among nine schools and colleges. No other university its size offers students such a comprehensive academic environment with personal attention from faculty-mentors. Jesuit and Catholic, it affords incomparable inter-professional education, bridging eight health professions programs with law, business and the arts and sciences – all on one walkable campus. Creighton University ranks in the top third of U.S. News & World Report’s rankings for National Universities.