SANTA ANA (CNS) - With the economy showing signs of slowing down ahead of the holiday shopping season's annual Black Friday kickoff, Orange County 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 at Chapman University, 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 (to be) as high, especially if the new president imposes tariffs, which will make things more expensive than cheaper on manufactured goods. It will push prices upward. So the picture is OK, but not as good as last year."
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 due to the loss in population both in Orange County and California, which ended up losing population, which ended up affecting taxable sales," Sfeir said. "This year, as of the beginning of this year Orange County added a very small number of people, like 9,000 this January as compared to last January. It's a very small increase in taxable sales for Orange County and California. It can be an improvement and no longer a negative because the population is no longer going down."
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," Sfeir told CNS. "Large companies like Target and Amazon are planning on large increases in seasonal employment, which is a good sign."
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.
"I still like going shopping and kicking the tires," Sfeir said. "I don't like shopping online."
The county's shopping centers are offering discounts to kick off the holiday shopping season, but there are fewer such events than in past years.
The Irvine Spectrum shopping center, however, has a full day of entertainment planned that includes performances by an a capella group, holiday karaoke, a DJ near the ice rink and other live musical performances.
South Coast Plaza in Costa Mesa features visits with Santa Claus and rides on the unique Reindeer Carousel and Santa's Express Train.