As Thanksgiving gives way to Black Friday, many economists say the fruits of the economy's recent pickup will become more visible after the holidays are done.
About 204,000 jobs have been added monthly since August, well above the 145,000 jobs a month in the three months before that, but the gains in hiring came too late in the year to produce more than a mediocre Christmas for stores, says Jack Kleinhenz, chief economist of the National Retail Federation.
The NRF forecasts a 3.9% sales gain this holiday season over last, only a bit better than last year's 3.4% increase.
"I expect a steady improvement, because employment is beginning to grow and that will help sales,'' Kleinhenz said. "We haven't had job growth early enough in 2013 to help out holiday 2013.''
The other factor holding back the holiday is that income growth has been too small to support spending sprees, said Joel Naroff, president of Naroff Economic Advisors, a consulting group that serves mostly regional banks.
If the NRF's holiday forecast hits the mark, that "would be really good, because we are not generating nearly that much in nominal income growth,'' Naroff said. Incomes won't rise enough to push consumer spending much higher until the unemployment rate, now 7.3%, moves toward 6.5%, a level it could reach by next October, Naroff added.
The shape of the recovery is likely to mean different holiday seasons for different kinds of retailers, as richer consumers' confidence is bolstered by rising stock and home values, as well as cash income that's rising faster than for average families.
Wal-Mart, which serves working-class customers whose incomes have been pressed during the sluggish recovery, lowered its full-year earnings projections Nov. 14 for the second time since August. But upscale jeweler Tiffany & Co. ra! ised fourth-quarter projections on Nov. 26.
"You don't do a December-to-remember promotion to sell Lexuses to people who work in stores,'' Naroff said.
The role of Grinch is played this season by Scott Hoyt of Moody's Analytics, who argues that the holiday outcome will reveal little about prospects for 2014.
"The bigger determinant of how the first half will go is our friends in Washington,'' he said, pointing to the deadlines in January and February for funding the government and raising the federal debt ceiling. If Congress balks, it could spark a reprise of the shutdown that roiled markets in September and early October, he said.
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Moody's is also less optimistic about how quickly the unemployment rate will come down even if the government doesn't spark another wave of anxiety, forecasting that joblessness won't come down to 6.5% until 2015.
"If we have nonsense coming from Washington, we don't get employment growth, we don't get wage growth, and we get stuck about where we are,'' Hoyt said.
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