Christmas shopping will likely feature a bit less variety than usual as importers are more selective on what goods to bring in. But overall, inventory shouldn’t be that affected. I do expect prices for products like furniture to be meaningfully higher than last year.
The price of toys has also increased significantly, as the majority of these toys are produced in China. Apparel and footwear prices have also gone up, since the bulk of these come from Vietnam, Bangladesh, China, and India, which are all experiencing tariffs. Again, retailers have been bulking up on inventory of these goods, but prices have nevertheless gone up.
One of the biggest problems is that with the government shutdown, the source of inflation data, the Bureau of Labor Statistics, is shut down. So economists and business planners do not have access to Consumer Price Index data. It’s like we’re flying blind. Once the BLS opens again, we will likely observe an increase in inflation.
E-commerce sales as a percentage of retail trade sales are holding steady, if not trending slightly up, seasonally adjusted. The non-seasonally-adjusted data shows Q4 always seeing an upward spike in sales, so I would estimate that somewhere between 17.5% to 18.5% of retail trade sales in Q4 will be e-commerce.
