ND1102118

Title: Shopping Urge Overcomes Economic Anxiety

Description: Americans are still spending despite continued uncertainty about the economy.

Page Content:

NEW YORK ? A bump in spending during the third quarter has increased growth to the highest level of 2011, according to the U.S. Department of Commerce, Bloomberg reports. ?Emotionally based indicators are suspect,? said James Paulsen, chief investment strategist at Wells Capital Management. ?There is a lot of anger out there. In a calmer time, these indicators might provide a better guide. Consumers are scared to death, but they are still spending.?

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Going into the holiday season, analysts predict that high-end retailers will outsell middle- and lower-income stores because upper-income consumers have been more ?resilient,? according to Edward Yruma, a KeyBanc Capital Markets analyst.

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Total consumption jumped 2.4 percent during the third quarter, the fastest for 2011, while retail sales advanced 1.1 percent in September, the most of the past seven months. Consumer confidence can mean a better future, but experts say not to rely too much on the figures.

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In early October, the National Retail Federation predicted an average holiday season this year with retail sales expected to increase 2.8 percent to $465.6 billion. While that growth is far lower than the 5.2 percent increase retailers experienced last year, it is slightly higher than the ten-year average holiday sales increase of 2.6 percent.

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?Retailers are optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season,? said NRF President and CEO Matthew Shay in a press release. ?While businesses remain concerned over the viability of the economic recovery, there is no doubt that the retail industry is in a better position this year to handle consumer uncertainty than it was in 2008 and 2009.?

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Content Subject: Operations

Formatted Article Date: November 2, 2011

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