Holiday Spending Forecast At Highest Level In 3 Years

Growth in jobs and personal income should help boost holiday spending to its highest level in three years, the International Council of Shopping Centers said Thursday.

The group expects shoppers will spend $488.6 billion in the November through January period, up 4 percent from last year, according to the trade group.

Holiday hiring, highly correlated with holiday spending, will increase 7.3 percent to 794,258 jobs, the group said.

"While consumers are expected to remain focused on price this holiday, the positive momentum of key economic indicators are pointing to consumers who are willing to open their wallets and hit the stores this holiday,” ICSC's Jesse Tron said.

Low debt levels coupled with stock market gains and increasing home prices may have "a wealth effect on consumers," which should boost holiday shopping, according to Daniel Bachman of the accounting and consulting firm Deloitte.

In a separate measure that tracks consumer cash flow as an indicator of future spending, the Deloitte Consumer Spending Index increased for the second straight month in September.

The index, which covers tax burden, initial unemployment claims, real wages and real home prices — increased to 4.21 this month from 4.11 last month.

"If employment and wages continue this positive trajectory, consumers are likely to respond with more confidence and higher spending.”

Deloitte is separately forecasting a 4 percent to 4.5 percent increase in overall holiday sales this year as shoppers "look to release pent-up demand and regain confidence in the economy," Bachman said.