Here at the National Retail Federation, we are very confident in our forecast that 2016 holiday season retail sales will increase 3.6 percent to $655.8 billion. The prediction is based on a careful analysis of data on job growth and income gains that have boosted consumer confidence, and is balanced against factors such as unseasonably warm weather and geopolitical uncertainty.
But there’s one factor we have tried to work into the forecast that is much more difficult to measure — this year’s presidential election. Elections are often too close to call, but the race between Hillary Clinton and Donald Trump is more than that. It’s like no election we have ever seen.
Let me be absolutely clear: NRF does not endorse presidential candidates and does not support or oppose either Clinton or Trump. In fact, we are not particularly happy with either candidate on a number of issues, especially their opposition to free and open international trade.
Whoever wins, the outcome of the election could have a significant long-term impact on a broad array of issues affecting retailers and the economy, including taxes, labor, trade, transportation, immigration and more. There will be a change in leadership, and with change comes uncertainty — the sort of uncertainty that keeps business people up at night.
While the policies of the Obama administration have been far from ideal, at least there was some degree of consistency in what to expect. With one candidate there could be predictability that many of those policies will continue. The other promises change, but at a wild card level that comes at the expense of predictability.
In the short term, the concern is how the election will affect the holiday shopping season. Consumers are clearly paying close attention, and election rhetoric is dominating discussions. As Election Day approaches, one candidate portrays the economic policies of the past eight years as a success. If you believe the other, things are terrible.
The truth, of course, is somewhere in the middle. The fundamentals of our nation’s economy show that we are adding jobs, wages are rising and consumer confidence is up. The economy is not growing at breakneck speed, but we don’t see people falling off the side of the world and not spending either.
It’s hard to measure the psyche of the electorate and how their feelings about the election will translate into consumer sentiment. If they are unhappy about the current state of the American political system, does that mean they won’t go out and buy? We don’t think so.
Ultimately, this is a joyous, gift-giving time of year. And we think American consumers are able to make a distinction: They can say they want to throw the bums out and yet set aside their frustrations and go buy gifts for their loved ones.
There are many things that keep business people up at night. But the American consumer is not one of them.