With the economy showing signs of slowing down ahead of the holiday shopping season’s annual Black Friday kickoff, Southern California retailers likely won’t see the profits they did last year, according to a Chapman University economics expert.
“People are spending more, but that’s because prices are higher, not because they’re buying more,” Raymond Sfeir, director of the A. Gary Anderson Center for Economic Research, told City News Service.
“People are spending more on services” such as traveling and dining, but less on manufactured goods, Sfeir said. “So things are not going to be as rosy as last year — and next year even a little bit worse because employment is not going as high, especially if the new President imposes tariffs, which will make things more expensive.”
“So the picture is OK, but not as good as last year,” he said.
The shift toward services such as traveling is a generational one, the professor said.
“The young people in particular value those experiences more than the older people,” Sfeir said.
Nationally, retail sales are increasing, but sales in California are declining, he said. That’s partly because parts of the state the growing slowly, and even losing populations.
And nationally, the country is generating fewer jobs, Sfeir noted.
“On the employment side things are not like what they were last year or at the beginning of this year and we’re creating fewer jobs and we believe this will continue next year as well,” he said.
For the first 10 months of 2023, national retail sales increased 3.4% over 2022, but this year the increase was 2.3%, Sfeir said.
“That’s a sign that retail sales are not growing as fast as they used to be,” he said. “In October, furniture went down and clothing went down, so people are spending less in these two categories.”
Meanwhile, online shopping continues to grow, with Cyber Monday is expected to be the best time to buy clothing and gadgets like phones and computers.
