Here’s the Latest Government Data on Jewelry Sales
Plus, National Retail Federation Chief Economist Jack Kleinhenz shares his thoughts on inflation and a possible recession.
Sales in the category in July were up 10 percent year-over-year, according to preliminary data from the U.S. Bureau of Economic Analysis (BEA).
Jewelry sales alone increased 10 percent year-over-year while watch sales were also up 10 percent.
In June, sales in the watch and jewelry category rose only 0.8 percent year-over-year, with jewelry sales increasing 0.9 percent and watch sales essentially flat.
Watch and jewelry sales were up 5 percent year-over-year in May and up 14 percent year-over-year in April, as per revised data.
Watch and jewelry sales for the full year are expected to continue to grow but won’t reach the highs of last year.
In 2021, dubbed by industry analyst Edahn Golan as “the year of jewelry,” sales in the category reached an estimated $115.29 billion, a 51 percent increase year-over-year, according to BEA data.
This year, as of July, full-year watch and jewelry sales are expected to reach an estimated $126.66 billion, a 10 percent year-over-year increase.
The overall economy is expected to be on a similar trajectory of slowing growth amid rising inflation and geopolitical unrest.
In the National Retail Federation’s August review, Chief Economist Jack Kleinhenz gave an overview of the current economic situation.
“Today, inflation is both sky-high and on everyone’s mind,” he said.
The Consumer Price Index, which measures the average change in prices over time consumers will pay for a basket of goods and services, rose about 9 percent year-over-year in both June and July.
“Many of the forces contributing to inflation will not be unwound soon but we are seeing some potential relief as commodity and oil prices decline,” he said.
As gas prices fell, CPI was flat month-over-month in July compared with a 1 percent increase in June.
Looking at the overall economy, Kleinhenz noted that key economic indicators, including employment, retail sales, income and industrial production have slowed, but have not yet reached contraction territory.
“Clearly, demand has slowed, but the slowdown is entirely a result of towering inflation,” he said.
The Federal Reserve has hiked interest rates an unprecedented amount recently in an effort to combat inflation, but the problem is complex.
“The Fed is caught between an economic rock and a monetary policy hard place,” he said.
If the Fed doesn’t do enough, inflation rates will continue to rise, but if it goes too far in adjusting monetary policy, there could be a recession.
“Consumer reaction to interest rate hikes is hardly immediate or predictable, making it impossible to judge the effect of the Fed’s actions in real time and quickly correct any oversteering,” said Kleinhenz.
As for the remainder of 2022, he predicted inflation forecasts will continue to be “highly uncertain” and that supply constraints will factor into the second half of the year.
The NRF has not changed its full-year outlook, and still expects 2022 retail sales will grow by a range of 6-8 percent year-over-year.
“The driver of the U.S. economy is the consumer and spending has been fueled by the stronger-than-ever labor market,” he added.
For now, Kleinhenz reiterated his prediction that the U.S. should be able to avoid a recession this year.
“Despite ongoing uncertainties, we believe the underlying strength of the economy is strong enough to deal with inflation and keep a recession at bay – or short-lived even if we are wrong.”
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