Will retailers cheer this holiday?
The season's tea leaves show good shopping lies ahead.
People are spending again, though largely on their own terms, and retailers like Amazon (AMZN), Wal-Mart (WMT) and Target (TGT) are preparing for a solid shopping season. That's despite an unemployment rate hovering at 9.6%.
We're not talking about a home run here. Forecasts predict only a 2% sales increase this holiday, but even that's welcome news to stores that limped along miserably in the recession. Let's take a look at some of the indicators and what they mean.
October sales were hot. Retail sales beat expectations, rising 1.2% in October, the Commerce Department said today. That was the biggest gain since March. Most of the increase was due to car buying, but catalog and online sales were still up 1% -- a good sign for Amazon. The clothing and accessories category saw a 0.7% increase. Post continues after video:
Leisure spending is up. In a struggling economy, people don't spend much on books or music. But October saw purchases in those categories rise by 1%, MarketWatch reports. Not a huge increase but enough to show that people are starting to spend more on leisure.
Retail stocks are surging. Investors are keen on retailers this year, pushing up the Standard & Poor's Supercomposite Retailing Index by 18%. The S&P 500 overall has risen only 7.5%, Bloomberg reports.
Retailers are hiring. At least half a million people are expected to be hired temporarily this season to sell items and stock shelves, The Washington Post reports. Amazon alone plans to hire more than 15,500 workers.
We'll get a better sense of the retail climate this week, as a number of retailers report third-quarter earnings. Wal-Mart reports tomorrow, and Target is scheduled for Wednesday. We'll also see reports from Abercrombie & Fitch (ANF), Home Depot (HD), Gap (GPS), Nordstrom (JWN) and Dollar Tree (DLTR).
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The solid report comes a month after the retailer closed all of its Canadian operations.
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