ORLANDO, Dec. 18, 2013 – Holiday spending this year is likely to be the weakest since 2009, leaving many retailers asking Santa what happened.
That’s according to the fourth quarter 2013 U.S. economic forecast released by the Economic Competitiveness Center at the University of Central Florida today.
“It’s the year without a Santa Claus; just look at the traditional start of the holiday shopping season,” said economist Sean Snaith. “Black Friday seemed more like Sooty Friday this year and the dirty business of trying to get U.S. consumers to spend more this holiday season is likely to result in retailers getting gored in this year’s running of the retail bulls.”
There are many reasons why consumers are being more restrained, he said: the uncertainty of how the economy will fare in 2014, how the Affordable Care Act ‘s implementation will play out both in terms of requiring people to pay for health care plans and how employers respond, and how a still-shaky labor market will resolve itself in 2014 are all giving people reason to pause.
Real consumer-spending growth is expected to come in at a 1.5 percent growth rate when the numbers for the third quarter are finally crunched. That’s not exactly a launching pad for the holiday shopping season, Snaith said.
There are some bright spots coming. (For the entire report clickhttp://www.iec.ucf.edu/post/2013/12/18/us-forecast-december-2013.aspx )
- The year-ending GDP growth in 2013 should average 1.7 percent before growth accelerates to 2.3 percent in 2014, 2.8 percent in 2015, and 2.9 percent in 2016. Growth will then ease back to 2.8percent in 2017 as the unwinding of monetary stimulus slows economic growth
- The housing market recovery continues along its protracted path. The housing market should steadily improve through 2016. During 2013- 2017, housing starts should rise from 913,348 in 2013 to 1,565,554 in 2017.
- Unemployment rates are expected to gradually fall to 6.0 percent in the fourth quarter of 2017. The caveat — underemployment (the number of people who have either given up looking for work or who are working part-time because they can’t find anything else) — remains a serious problem and currently stands at 13.2 percent.
In this forecast, Snaith said a partisan economic policy is the problem with the economy, not the solution. He said the Stimulus Act of2009, the Affordable Care Act and the Dodd–Frank Wall Street Reform and Consumer Protection Act have either failed to deliver what they promised or have caused unintended consequences that together are holding back the economy from a full recovery.
“In my opinion, in all three instances legislative action was necessary; it is unfortunate that it happened in an extremely partisan fashion,” Snaith said. “This is not to say a straight Republican version of any of these laws would have been the perfect solution either. I am a firm believer that both sanity and the solutions to our major problems lay in the middle of the political spectrum and not to the far left or the far right.”
Snaith is the director of UCF’s Institute for Economic Competitiveness. He is a national expert in economics, forecasting, market sizing and economic analysis who authors quarterly reports about the state of the economy. Bloomberg News has named Snaith as one of the country’s most accurate forecasters for his predictions about the Federal Reserve’s benchmark interest rate, the Federal Funds rate.
Snaith also is a member of several national forecasting panels, including The Wall Street Journal Economic Forecasting Survey, CNNMoney.com‘s survey of leading economists, the Associated Press Economy Survey, the National Association of Business Economics Quarterly Outlook Survey Panel, the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters, the Livingston Survey, Bloomberg U.S. Economic Indicator Survey, Reuters U.S. Economy Survey and USA Today Economic Survey Panel.
The Institute for Economic Competitiveness strives to provide complete, accurate and timely national, state and regional forecasts and economic analyses. Through these analyses, the institute provides valuable resources to the public and private sectors for informed decision-making.
– UCF –
50 Years of Achievement: The University of Central Florida, the nation’s second-largest university with nearly 60,000 students, is celebrating its 50th anniversary in 2013. UCF has grown in size,quality, diversity and reputation, and today the university offers more than 200 degree programs at its main campus in Orlando and more than a dozen other locations. Known as America’s leading partnership university, UCF is an economic engine attracting and supporting industries vital to the region’s success now and into the future. For more information, visit http://today.ucf.edu.