NEW YORK: US consumers turned out in force in stores and online over the Thanksgiving weekend, a key stretch in the holiday shopping season, a leading retailer group said. A total of 197 million shoppers, about 59 percent of the US population, made purchases during a five-day stretch that includes Black Friday and Cyber Monday, according to figures from the National Retail Federation. That number is a bit below the record 2023 level of 200.4 million, but the second highest ever, reflecting the renewed desire to get out and about after the pandemic years, said NRF President Matthew Shay. A total of 126 million people shopped in-store in 2024 compared with the 124.3 million who shopped online; the reverse was true in 2023.

Shay said consumers are “more thoughtful and deliberate” about purchases after a painful stretch of inflation. But pricing dynamics have improved from a few years ago, with workers’ wages rising more quickly than inflation. “Consumers are overall in a good place,” according to Shay. The NRF has warned that tariffs discussed by President-elect Donald Trump could cost Americans $78 billion in annual spending power. Shay said consumers have not so far adjusted their spending behavior in anticipation of tariffs but that the concern could impact sales as the season progresses. “Consumers are aware of the impact of tariffs and highly sensitive to the impact of pricing,” he said.

The NRF has projected holiday spending growth of between 2.5 and 3.5 percent in the 2024 season compared with the year-ago period, to as much as $989 billion over the two-month period. Other consumer data about the holiday period has also pointed to good sales. Adobe Analytics estimated sales on Cyber Monday at $13.3 billion, up 7.3 percent from the year-ago level and above Adobe’s projection. Over the same five-day stretch, sales were $41.1 billion, up 8.2 percent.

December rate cut

Meanwhile, a December interest rate cut is still up for debate, a senior US Federal Reserve official said Tuesday, suggesting that another rate reduction is not a foregone conclusion. “In order to keep the economy in a good place, we have to continue to recalibrate policy,” San Francisco Fed President Mary Daly said during an interview with Fox Business. “Now, whether it will be in December or sometime later, that’s a question we’ll have a chance to debate and discuss at our next meeting,” added Daly, who will have a vote at the Fed’s rate-setting committee meeting on December 17 and 18. The US central bank has been on a journey since the Covid-19 pandemic, hiking interest rates to a two-decade high and holding them there in order to tame a surge in inflation, before starting to dial back rates in recent months.

The US economy is now relatively healthy, with robust economic growth, an unemployment rate still relatively close to historic lows, and inflation at 2.3 percent in October, according to the Fed’s favored measure - just above its long-term target of two percent. Daly’s remarks Tuesday appear slightly more cautious than Fed governor Christopher Waller, her colleague on the bank’s rate-setting committee. “At present I lean toward supporting a cut to the policy rate at our December meeting,” Waller said on Monday, noting that many people still expected inflation to fall to the Fed’s two percent target over the medium term.

“I believe the evidence is strong that policy continues to be significantly restrictive,” he continued, adding that even an additional rate cut would mean that rates would only be slightly less restrictive than they are now. Financial markets currently assign a probability of around 70 percent that the Fed will cut rates by a quarter percentage-point at its December meeting, and a roughly 30 percent chance it will pause, according to data from CME Group. That would leave the Fed’s benchmark lending rate between 4.25 and 4.50 percent - one percentage point below its level before the Fed started cutting rates in September. — AFP