Many U.S. retailers faced challenges in the fall quarter, with Best Buy reporting one of its worst three-month stretches in a decade due in part to the distraction of the presidential election. However, following a GOP sweep in the election, retailers are seeing a boost in holiday sales momentum, particularly in products like computers and tablets. Consumer confidence is on the rise, with Gallup’s Economic Confidence Index showing improvement, driven by a decrease in negative ratings and an increase in those believing the economy is getting better.
The Conference Board’s consumer confidence report also surged to its highest level in 18 months, with optimism about family finances and job availability reaching new highs. Retailers like Abercrombie & Fitch and Burlington are optimistic about holiday sales, with both expecting growth ahead of analyst expectations. Wall Street is responding positively to the overall outlook, with retail-focused stocks up 10% for the month and heading for the best month since February.
The Philadelphia Federal Reserve’s quarterly survey of economic forecasters also predicts improved economic growth in the coming months compared to previous estimates. The survey now shows the U.S. economy expanding at a rate of 2.2% in the next three months and 1.9% in the first quarter of 2025. Overall, the outlook for retailers and the economy as a whole is looking more positive following the election and amid improving consumer confidence.
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