Back to school sales – shopping for new clothes for students, laptops, printers, desks, phones, text books, backpacks, organizers, notebooks, pens, pencils, etc., are upon us. The National Retail Federation (NRF) states that the back to school season “is the second-biggest consumer spending season of the year other than the winter holidays.” A willingness by consumers to buy is one indicator economists use to determine if an economy is improving or not.
The NRF predicts a slight increase in 2014 versus 2013 in back to school sales which hopefully is a good sign for the US economy. The NRF predicts a whopping $74.94 billion (yes billion) will be spent on “back to school” items this summer, compared to $72.557 billion in 2013. The 2014 season breaks down as follows:
- $26.541 billion for families with school-age children, down slightly from $26.718 in 2013.
- $48.399 billion for families with college students, up from $45.839 in 2013.
The over $2 billion increase from 2013 to 2014 can be explained by looking at college student back to school spend which was up almost $2.5 billion, while families with school age kids was down by $177 million. Let’s hope this overall is a trend in the right direction. I will note that the best back to school year spend since 2007 was 2012 when consumers spent $30.312 and $53.454 billion respectively for school age and college aged children, for a total of $83.766 billion.
I cannot get overly optimistic that the spending data may predict better things for the economy, because while consumers spent more for back to school items, overall spending does not go up by a corresponding amount since consumers cut their spending in other areas.