In OC, it could pay to wait on Black Friday deals this holiday season

SANTA ANA, Calif. - The economy has shown signs of improvement and retailers are well-stocked, but consumers are spending less, so it might pay off for Black Friday bargain hunters to wait for better deals this holiday season, according to a Chapman University economics expert.

"Things for the consumer are better," said Raymond Sfeir, director of the A. Gary Anderson Center for Economic Research..

But many consumers still see higher-than-expected prices at the grocery store so it dampens consumer confidence, Sfeir said.

In the third quarter, consumption rose 2.4%, but the GDP grew by 2.9%, "so consumption increased less than the GDP," Sfeir said. "In previous quarters consumption was at a higher rate than the GDP. So this already indicates that consumption, although it is still growing, it is not at the high rate as last year and the year before that."

Sfeir added that retail sales in October increased by 2.5% compared to October 2022, but October 2002 retail sales were 8.8% higher than October 2021's, Sfeir said.

"So you can already see retail sales are still increasing in October compared to the previous year, but not as much as prior years," he said. "Retail sales in October were a little lower than September, but there was inflation in October so the amount of what was sold was negative compared to September.

"Even though it decreased just one-tenth of one percent sales went down more than half than that. So things don't look as good as last year. We're still humming. Consumers are still spending, but not at the same rate as before."

Sfeir said big-ticket items like furniture and cars are down as well as building materials and gardening equipment.

"Part of the reason is people buy furniture and cars by borrowing money but the interest rates are high," Sfeir said.

Jobs are still being added, but not at the same rate last year, Sfeir noted.

"We added 150,000 jobs in October, but a year ago we added 340,000 jobs," he said. "So we're still adding jobs, but nothing like a year ago."

Consumers are ramping up spending on various services, "but not as much on goods," Sfeir said. "They're willing to spend money on restaurants or Disneyland, but not as much on real goods, manufactured goods."

That trend was true last year and the year before, but the pandemic cut into supply chains, Sfeir said.

"Now retailers have plenty of goods to sell, but consumers are not spending as much," Sfeir said. "The supply is so high they're really stocked well now, but consumers are not spending on goods, so there will be a lot of good deals on Friday."

Many young adults are back to paying off student loans, so that might cut into the spending, Sfeir said.

"That's not a huge impact, but still," Sfeir said.

The writers and actors strikes will also have its impact, Sfeir said. Not only will the actors and writers be inclined to tighten the belts, the ancillary businesses that depend on the entertainment industry were also affected, he added.

But with the labor stoppages settled, "That will be a plus for everybody. Now that Christmas is coming they'll have a salary to buy toys for their kids," he said.

"My feeling is the increase retail sales in November or December will not be as good as last year," he said..

Last year, sales increased 5.3%, but this year Sfeir estimated it may only go up by 4%.

Orange County's economy "has not done well when it comes to employment," Sfeir said. "We have a lag in growth rate compared to California and the U.S. We have not created as many jobs as California and the U.S."

Sfeir said there's been an "outflow" of population from the county due to the higher cost of living.

"We expect things to be not much different in 2024, unfortunately," Sfeir said.

The county's main shopping centers will offer a variety of attractions to mark the start of the holiday shopping season.

South Coast Plaza in Costa Mesa is offering visits with Santa Claus at Santa's Village and rides on the unique Reindeer Carousel and Santa's Express Train.

The District at Tustin Legacy is touting its new Barnes and Noble bookstore, a destination for bookworms in the area since a fire shuttered the chain's store in Orange. The shopping center will also have the Gingerbread Challenge, starting Dec. 1, which features architects and engineers showcasing their talents using gingerbread, candy and icing.

At the Irvine Spectrum, shoppers will enjoy the a capella group Bank of Harmony, holiday music from DJs as well as the Tinseltones and the Dan Olivo Jazz Band.