Part 4/8:
Van Meter draws attention to the broader implications for retail businesses. Despite headline figures suggesting a robust holiday shopping season, when analyzing real retail sales adjusted for inflation, the picture is rather grim. Year-over-year changes in real retail sales were barely positive, indicating a holiday “bump” driven more by consumer anxiety over upcoming tariffs than sustained economic growth.
Many consumers may have been motivated to purchase in advance of rising prices, creating a temporary spike in spending that is unlikely to be sustained. This raises alarms about a potential drop in consumer demand as households focus on debt repayment amidst high inflation rates and interest costs.