17-Year High in Consumer Confidence, 17-Year Low in Unemployment Drive Big Christmas Spending

Shoppers on an escaltor pass by a Christmas tree on a Special Shopping Sunday in the Stadtgalerie in Hameln, Germany, 27 December 2015. Photo: Peter Steffen/dpa Peter Steffen / DPA
Peter Steffen/dpa/AFP

U.S. consumer confidence continued to rise in the final months of President Donald Trump’s first year, hitting the highest level in 17 years, while unemployment has plunged to the lowest level during that same time.

The U.S. reached these milestone rates in October and November, and with holiday sales through Christmas Eve reaching rates not seen since 2011, there may be news of more records as numbers come in during the coming months.

American shoppers hit the stores and Internet shopping this holiday season, driving sales up 4.9 percent from November 1 through Christmas Eve, a rate not seen since 2011 according to Mastercard SpendingPulse. The service tracks both online and in-store purchases. E-commerce drove increases with an 18.1 percent rise alone.

Sarah Quinlan, senior vice president of marketing insights at Mastercard, pointed to a rise that began in the week leading up to Black Friday this year. According to Quinlan, consumers are opening their pocketbooks more for travel, entertainment and food, or “experiences” than they are for “goods” at traditional retailers. Airline ticket sales were up in November.

Spending this year shifted from a strong drive from high-income shoppers to a wider range of income earners, according to the Wall Street Journal. Their report offered caution, as delinquency on credit card balances is up a similar 16 percent. National Retail Federation chief economist Jack Kleinhenz commented on the rising stock market and “wealth effect,” stating that “people are saving less because they feel they have some job security.”

Electronics and appliance purchases hit a decade-high increase of 7.5 percent, according to the Mastercard tracking, while home furnishing and improvement spending was up 5.1 percent. Jewelry sales were up 5.9 percent, while apparel purchases rose 2.7 percent.

The current week between Christmas and New Years is expected to bring 11 percent of the season’s sales, approximately $69 billion. Kohl’s chief marketing officer called the week “really big,” according to the WSJ. Given the continuing upward trend, reports could show more record highs early next year as the numbers flow in.

Follow Michelle Moons on Twitter @MichelleDiana.

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