“There are several factors coming together to have a major impact on the holiday outlook, but household fundamentals are a bright spot in the uncertain present,” Kleinhenz said. “Consumers are in a very favourable position going into the last months of the year and are spending because they can.”

Kleinhenz’s remarks came in the November issue of NRF’s Monthly Economic Review, which expanded on the reasoning behind NRF’s forecast last week that 2021 holiday retail sales during November and December will grow between 8.5% and 10.5% over 2020 to a total between $843.4 billion and $859 billion.

A “savings buffer” of about $2.5 trillion accumulated by consumers who have largely stayed home rather than dining out or traveling during the pandemic has “supercharged” spending. In the meantime, income is growing in the form of more jobs, more hours and higher wages reflecting businesses’ competition for workers during the current labour shortage. Household wealth hit another record high during the second quarter (the latest data available) and has boosted consumer confidence.

Kleinhenz said the strong growth in income and “stockpiled savings” should help spending overcome inflation that has been driven both by consumer demand and supply chain disruptions. The challenge when – and if – sales begin to fall will be whether the drop is caused by weaker demand or reduced product availability.

Kleinhenz said higher gasoline prices and higher energy costs for home heating will divert some money that could otherwise go to retail sales, especially with weather forecasters saying a La Niña pattern will likely bring cold weather this winter. Nonetheless, a La Niña has coincided with stronger retail sales in the past.