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Consumer Spending, Apparel Sales Poised for Growth

Improving weather is expected to help boost sales.

Women’s Wear Daily
By: Arthur Zaczkiewicz

Apparel sales are expected to rise as weather improves.

If weather is an indicator, consumer spending should rise over the next two weeks despite an expected snow storm in the mid-Atlantic states and New England, according to analytics firm Planalytics, which expects an uptick in apparel sales as a result.

And that’s good news for the economy, according to a leading economist who notes that consumer spending and a rebound in the housing market are two bright spots in the economic picture.

Planalytics said in its weekly report that warmer weather is resulting in “many consumers thinking and purchasing spring. The warming conditions during the Easter run-up period will help drive demand for seasonal apparel as well as live goods.”

Looking ahead, the analytics firm said “western locations can expect strong gains for both spring apparel and consumables.”

“Sandals, short sleeve shirts, cold beverages and sun care will be in demand as temperatures rise above normal,” the researchers said. “Portions of the Northeast can anticipate increases for similar items as well. Traffic into restaurants will also be favorable for many over the holiday weekend.”

Last week, the warmer weather already had an impact on retail sales — but not in all regions. In a separate report, The Retail Economist-Goldman Sachs Weekly Chain Store Sales Index rose 1.4 percent last week. And on a year-over-year basis, sales jumped 2.7 percent. Michael Niemira, chief economist of The Retail Economist LLC, said springlike “weather continued to drive interest in spring clothing in the east over the past week, but cool and wet weather in the west curtained demand.”

Niemira noted that “the earlier Easter this year than last [March 27 versus April 5, 2015] is adding a slight ‘Easter boost’ to sales currently, but the net growth-rate impact for the season is likely to be modest.”

Regarding weather, Planalytics said during Easter weekend, “businesses throughout North America can expect above normal temperatures in most markets. The strongest warmth compared to normal will be along the West Coast and from the Plains to the East Coast.” For this coming weekend, Planalytics is expecting “old man winter” to “put a damper on the first day of spring” in the mid-Atlantic and Northeast regions.”

A rise in retail sales follows a period of weakness, which has impacted apparel retailers in particular. So an improvement is most welcome. IHS chief economist Nariman Behravesh said “consumer spending and housing will keep powering the economy along.”

“The consumer outlook remains bright — despite recent weakness in retail sales — premised on the continuation of robust gains in employment, real disposable income, and household net worth,” Behravesh said in his economic outlook report. “Housing markets continue to recover, and IHS Global Insight sees real residential investment increasing nearly 9 percent again in 2016. Real [gross domestic product] growth is expected to rebound in the first quarter and accelerate gradually through the end of the year.”

Behravesh also noted that the “labor market performance has been solid.”

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