The Day Of The Holiday Shopping Season

884 Words Oct 12th, 2016 4 Pages
Thanksgiving day marks the beginning of the holiday shopping season. Americans are more inclined to take out their credit cards – ‘tis the season to be jolly and shop. One would think that consumers holiday shopping greatly affects gross domestic product (GDP). After all, personal consumption expenditure is roughly 70% of U.S. GDP. GDP growth in the last quarters however, have not consistently exceeded the other three quarters of the year looking at data after the 2007-2009 Great Recession. Nevertheless, retail sales - a leading indicator – provide clues on the economy’s overall consumption activity.
An uptick in retails sales is expected in December each year. Based on historical data, monthly retail sales – that is retail trade and food services excluding autos, show a definitive pattern: December retail sales are higher than other months of the year. Data going back the last 23 years show double-digit retail sales growth in each December. In December last year, monthly retail sales increased 17.9% from November – a $64.7 billion increase. In 2014 the increase in retail sales from November to December was $55.8 billion.
American’s shopping spree affects credit union operations. Unlike auto and mortgage lending which is roughly 80% of credit union loan portfolio combined, last year credit card loans was 6.2% of loan portfolio. In the last five years, credit card loans stayed above 6.0% (but under 7.0%) of credit unions loan portfolio – with a high of 6.6% in 2012. It…
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