If you think it's tough to get a read on how consumers are feeling now, think about what it's like for retailers who are trying to forecast how generous their customers will be at Christmastime. That's the problem retail buyers are confronted with right now as they begin to order their inventory for the fall and winter season.
There have been many signs that the economy is improving. Retail sales jumped in March and businesses increased their inventories at the highest rate since July 2008. Both are signals of higher demand, but the job picture remains cloudy. For the past two weeks, the number of newly laid off people signing up for unemployment benefits rose sharply. This suggests that unemployment will remain stubbornly high.
No doubt many retailers agreed with Emanual Chirico, CEO of Phillips-Van Heusen, when he said he will likely feel better in the second half of the year, after he's seen a few quarters of accelerating consumer demand. Stacy Janiak, who heads up Deloitte's retail industry research, said she expects retailers to continue to be cautious this year. "I don't think we'll see a major ramp up in inventory," Janiak said. Still, retailers are likely to place bets selectively on certain items they think will appeal to their customers, and the items they pick may be slightly more expensive than last year.