When it comes to the holiday shopping season, the last few years presented considerable challenges to the retail and logistics industries. Global events, from the pandemic in 2020 to port backlogs in 2021 and inflation in 2022, made the holiday season less than festive for many.
However, this season appears to be a different story. All signs point to a joyful economic Christmas, with sales on the rise and the logistics industry delivering packages on time, just like Santa’s magical reindeer.
Based on the Lewis-Mertens-Stock index, which provides weekly economic data, we predict a 1.8% growth compared to last year. This index considers various factors such as consumer sales, employment data, energy consumption, and more, providing an up-to-date snapshot of the U.S. economy.
While average per-person spending during the holidays has dipped slightly over the past four years, early shopping trends indicate a strong start to this year’s holiday season. A record-breaking 200.4 million consumers shopped from Thanksgiving to Cyber Monday, surpassing previous years’ numbers. This surge in early shopping may explain why inventory levels decreased in November as customers stocked up on holiday items.
The supply chain is also experiencing more stability than in previous years, which is crucial because 40% of consumers say they would consider switching brands if their items don’t arrive on time. ShipMatrix, a logistics software company, reports that major national carriers, including FedEx, UPS, and the U.S. Postal Service, maintained on-time performance rates above 94% in 2022. They expect similar rates for 2023, with a peak of 82 million parcels delivered per day against a capacity of 120 million.
While it’s too early to declare complete victory in supply chain normalization, consumer spending remains resilient, outpacing inflation with wage growth. As we move into 2024, the economy may continue to strengthen.
