By Gary Symons
TLL Editor in Chief
Yeah, it’s been a tough couple of years for the licensing industry, and the grind through the COVID-19 pandemic isn’t over yet, but there are encouraging signs that a full recovery is right around the corner.
One of those indicators is the soaring numbers for retail sales in March, after an extremely disappointing February. The US Commerce Department says a resurgence in COVID infections in February saw retail sales decline by 2.7 per cent, which was more than analysts had predicted. However, in March, as the US government posted a faster than expected vaccination rate and Americans received their stimulus cheques, those sales numbers reversed. The Commerce Departments says retail sales soared by a seasonally adjusted 9.8 per cent in March compared to February, which is the steepest increase since May, 2020.
The increase was also far better than expected by economists. According to a survey by Refinitiv, economists had been predicting a 5.7 per cent increase for March.
The other piece of good news in these numbers is where the increases were seen, which includes sectors that were hit very hard during the pandemic. For example, fashion sales grew by 18.3 per cent, and restaurant sales jumped by 13.4 per cent; certainly an encouraging sign for an industry under siege by the virus.
Most economists pointed to a number of factors for the jump in revenue, including the increase in vaccinations, loosened restrictions on retail outlets and restaurants, and lastly an improving jobs market that is creating a feedback loop in the overall economy. As more people spend on retail, more jobs are created, which allows more people to spend on retail, creating yet more jobs.
According to the US Labor Department, the job market in the US showed a tremendous surge with 916,000 new jobs, which is the biggest gain in employment numbers since last August.
This week, the Forbes Advisor-Ipsos Consumer Confidence Weekly Tracker saw an all-time high for its expectations index, “which measures consumers’ outlook on their personal financial situation, community economy and employment.” This past week the index reached 70.6 out of 100, higher than the previous record high of 69.1 that occurred in February, 2018, two years before the pandemic hit America’s shores.
“The expectations index is currently 9.2 points higher than its historical average, indicating that Americans are feeling renewed confidence as vaccination efforts continue and local economies reopen,” say Forbes and Ipsos.
If those numbers seem unrealistically high, that’s largely because the index measures where Americans feel they will be financially six months into the future, and the study authors say the overall economy will still face challenges until the pandemic is truly ended.
““Given the whiplash we’ve all experienced over the last year, we’ve seen a surge in expectations because virtually all people are expecting things to get better,” says Chris Jackson, senior vice president of public affairs at Ipsos. As life continues to get closer and closer to what we remember as normal, Jackson says the expectations index will level off and be more in line with overall consumer confidence, which is currently at 61.2.
Nevertheless, those numbers also reflect the attitude among the American public that life is expected to get back to normal within the next six months, and that confidence is allowing consumers to once again open their wallets; a tremendous sign for the licensing sector, which depends almost completely on the retail consumer.