Holiday Season Start Shows U.S. Consumers Are Spending Big
The Holiday Season officially kicked off last Friday with online sales reaching $7.2 billion, the second largest shopping day ever, coming second only to Cyber Monday last year[i]. The average person spent $168, an increase of 6% from last year.
Cyber Monday was even more impressive, setting new records with online shoppers spending a staggering $9.4 billion[ii]. That was up 19.7% from 2018 according to Adobe Analytics.
Seeing consumers continue to spend is positive news for the U.S. economy. Consumer consumption accounts for approximately 70% of U.S. GDP, therefore if we want to continue to see positive GDP growth, we need consumers to continue buying goods and services. That is exactly what we are observing so far and what we will keep monitoring this Holiday Season.
The two opposing views in 2019 have been: 1) The U.S. manufacturing industry is in contraction territory and will pull down GDP growth and send us into a recession. 2) The U.S. consumer is driving GDP growth and is strong enough to compensate for the slowdown in manufacturing and a recession is not imminent.
As the year is coming to a close, we can clearly observe that we did not go into a recession this year and that the U.S. consumer is still strong enough to keep GDP growth positive. The Surevest Investment Committee has maintained the position that although growth is likely to slow down, it will remain positive making a near term recession unlikely.