JPMorgan Sees Weak Holiday Spending and Warns of a Retail Slowdown
(Bloomberg) -- Year-end holiday spending in the U.S. is coming in notably weaker this year than in the recent past, signaling that retail sales are set to end the year with a whimper, according to JPMorgan Chase & Co.
The pace of purchases made on credit cards from Thanksgiving through early December was slower this year compared with both the pandemic-affected 2020 and pre-Covid 2019, according to the Wall Street bank, one of the largest issuers of such cards. That signals December retail sales data will likely be “downbeat,” according to JPMorgan economist Daniel Silver.
“This recent weakening could reflect new concerns about the highly transmissible omicron variant or increases in Covid cases more generally, which have in the past weighed on consumer spending,” Silver wrote in a research note to clients Friday.
A slowdown in categories including airfares and lodging point to consumers delaying travel -- suggesting a blow to sentiment due to the highly transmissible Omicron variant, he said.
A report this week showed that retail spending in November was weaker than forecast, rising just 0.3% for the smallest gain in four months. Inflation likely played a role, with higher prices dissuading consumers, economists said.
Despite the holiday-season concerns, most forecasters are upbeat about the economy and consumer spending next year. The median forecast for U.S. growth in the first half of 2022 is above that of the previous post-recession period, a Bloomberg survey shows.
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