MOLINE, Ill. — All across the nation, families are getting ready to send their kids back to the classroom. For the retail industry, the back-to-school season is one of the largest shopping events of the year, second only to the November-December holiday shopping season. According to the National Retail Federation, American families will spend a combined $125.4 billion this season on electronics, clothing and other school-related supplies.
News 8's Devin Brooks spoke with Mark Grywacheski from the Quad Cities Investment Group about back-to-school spending projections and how much families could end up paying.
Devin: With families still facing high inflation and high interest rates, give us your take on the latest back-to-school spending projections.
Mark: The $125.4B in spending the NRF expects for this year’s back-to-school (BTS) season is actually broken down into two categories.
1. BTS spending for kids in grades K-12
2. Back-to-college (BTC) spending
This year, American families are expected to spend $38.8B on BTS items for their K-12 kids. This is actually down 6.5% from last year. On average, each family will spend $874.68 on their K-12 kids for clothing, electronics and other BTS essentials.
BTC spending is expected to reach $86.6B, down 7.9% from last year. On average, each family will spend $1,364.75 on those BTC items.
So, you’re definitely seeing a pullback in spending from last year.
Devin: What are some of the shopping trends we’re seeing this season? Also, what advice do you have for families who may not have started their shopping yet?
Mark: One of the big trends is that families are starting their shopping much earlier. 55% of BTS shoppers started their shopping in early July. 25% started in early June. There are two main reasons for that:
1. It helps spread out the impact on the family budget.
2. It allows families to capture those big deals and discounts typically offered over the July 4th holiday or Prime Day to really save some money.
But even if you haven’t started your BTS shopping, there are still a lot of discounts to be had if you look for them. And finally, stick to your budget. And seeking out those shopping deals can help you do that.
Devin: Finally, I want to quickly pivot to the stock market. Just a few weeks ago we saw this big sell-off in the stock market. But last week the S&P 500 gained almost 4%, its best weekly performance of 2024. Why this sudden turnaround in the stock market?
Mark: As we spoke about the other week, there’s now this changing narrative on the state of the US economy. We now expect it to significantly weaken in the 2nd half of the year. But we don’t know the extent of that severity.
- Will we get a severe recession?
- Will we get a mild recession?
- Will the economy remain just strong enough to avoid a recession?
Nobody knows that answer! So, as more and more economic data comes out, Wall St. is trying to provide some clarity to that very cloudy outlook. And Wall St. is reacting to this good news/bad news on the latest data that’s released. This is causing these big up/down swings in the stock market.
Unfortunately, it’s going to take some time to get clarity on the economic outlook. And that likely means we’ll continue to see these big up/down swings until Wall St. gets that clarity.
___________________________________________
Quad Cities Investment Group is a Registered Investment Adviser. This material is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Quad Cities Investment Group and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Quad Cities Investment Group unless a client service agreement is in place.
Watch more Your Money with Mark segments on News 8's YouTube channel