Higher Pay Seen Easing Tariff Drag as U.S. Heads Back to School

(Bloomberg) -- The trade war isn’t deterring U.S. shoppers from their back-to-school spending, according to one research firm.

School shopping will rise about 5.1 percent to a record $595 billion in the July-to-September period in part because of higher disposable income and employment gains, Customer Growth Partners said in a report. Spending rose 4.3 percent in the same period last year, the firm’s research shows.

Higher Pay Seen Easing Tariff Drag as U.S. Heads Back to School

“The massive growth in household income will provide a halo over consumer spending even in the wake of new tariffs -- and even a friendly tailwind to retailers’ sales growth,” CGP President Craig Johnson said in an interview.

The strong demand for back-to-school may indicate a healthy Christmas season for retailers, Johnson said. That would be a welcome development for an industry that’s struggled with changing consumer tastes and falling traffic at brick-and-mortar locations.

There’s been little or no impact on shopping tendency so far from the round of tariffs between the U.S. and its main trade partners.

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