Despite mixed economic signals, a wave of optimism is cresting through U.S. retail as stronger-than-expected holiday sales prompt stores to ramp up imports for early 2024. This bullish sentiment has revised import forecasts upwards, painting a picture of a potentially record-breaking festive season.

The Global Port Tracker (GPT) is predicting a 11.5% y/y surge in December imports compared to last year, a sign of overflowing holiday stockings. The momentum is expected to carry over into the new year, with January imports projected to rise by 6.6% y/y, reaching 1.93 million TEU. Even February, typically quiet due to Lunar New Year closures, is forecast to witness a 14.5% y/y jump to 1.77 million TEU. March and April are also slated for growth, with imports anticipated to hit 1.75 million TEU (+7.7% y/y) and 1.8 million TEU (+1% y/y) respectively.

This surge in optimism stems from an unexpected burst of growth in September and October, as noted by Jonathan Gold, VP for supply chain at the National Retail Federation (NRF). This bullish outlook is reflected in their revised holiday sales forecast, predicting a 3% to 4% increase over last year, translating to a total haul of between $957.3 billion and $966.6 billion.

The upbeat mood extends beyond the NRF, with data analytics firm PIERS reporting a consistent rise in U.S. imports from Asia since April, culminating in a 10.8% y/y jump in November volumes. This robust consumer spending has even prompted S&P Global to revise its U.S. GDP forecast upwards, from 1.4% to 1.5%.

Overall, the picture that emerges is one of cautious optimism in the face of economic uncertainty. Strong holiday sales are fueling an import boom, with retailers betting on a continued wave of consumer spending in the new year. Whether this optimism materializes into a record-breaking season remains to be seen, but the current tide is definitely flowing in that direction.

Source: Journal of Commerce