The National Retail Federation (NRF) implored President Obama and Congress to come up with an urgent plan to avoid the tax increases and spending cuts — the so-called “fiscal cliff” — set to take effect in January.
The NRF warns that unless a fix is reached by Thanksgiving — November 22 — uncertainty over what lies ahead threatens consumer confidence during the crucial holiday shopping season that begins on Black Friday.
Signs that the fiscal cliff and other economic concerns are already weighing on spending came yesterday, as figures showed US retail sales cooled for the first time in three months in October.
“Although most economists have focused on the impact to the economy in 2013, more immediate economic consequences could occur over the next few weeks if consumers lose confidence in the ability of policymakers to work together to solve tough problems,” said NRF president and CEO Matthew Shay. “Any disruption to consumer confidence and spending during this season could prompt a crisis for retailers.”
Shay believes that instead of setting New Year’s Eve as its deadline, Washington “needs to act quickly to set in place a framework for resolving this situation, preferably before Thanksgiving.”
His comments were made in a letter sent to the President and all members of the House and Senate.
Many retailers make a quarter or more of their annual sales during the November to December holiday season — and NRF forecasts that holiday sales are set to increase 4.1% to $586.1 billion this year.
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