With More Money In Consumer Pockets, Back-To-School Sales Give Retailers A Boost The National Retail Federation predicts this year's back-to-school spending will shoot up. With a fall in gas prices, and lower inflation and interest rates, economists say Americans have extra cash.
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With More Money In Consumer Pockets, Back-To-School Sales Give Retailers A Boost

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With More Money In Consumer Pockets, Back-To-School Sales Give Retailers A Boost

With More Money In Consumer Pockets, Back-To-School Sales Give Retailers A Boost

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ELISE HU, HOST:

The economy - always a crucial issue in every election. But if back-to-school shopping is any indicator, things are looking better for consumers. Susanna Capelouto of member station WABE in Atlanta, where school starts in just a few weeks, reports on the upbeat outlook.

SUSANNA CAPELOUTO, BYLINE: Five-year-old Journee Henderson is ready for...

JOURNEE HENDERSON: Kindergarten.

CAPELOUTO: And she just got some school supplies at a Target store in Atlanta.

JOURNEE: We got crayons. And we got markers.

CAPELOUTO: Her mom, Traci Henderson, also bought clothes and more supplies. Henderson has spent a lot of time here this summer to get all the things the schools ask for.

TRACI HENDERSON: We're getting notes and notification - well, you need this. You need that. So soon as we get that notification, we're here at the store. So, I mean, we've been here I don't know how many times shopping (laughter).

CAPELOUTO: She will spend about $500 on back-to-school shopping this year for Journee and her two older siblings. It's more than last year, she says, but she's not complaining. It's not as hard for Americans to spend a little more this summer.

CHRIS CHRISTOPHER: They can afford more.

CAPELOUTO: Chris Christopher analyzes consumer spending for IHS Global Insight.

CHRISTOPHER: Yeah, they have a little bit more money in their pockets not because wage gains are very, very strong. They're not. It's just that consumer price inflation is relatively modest.

CAPELOUTO: Wages are up about two and a half percent over last year, he says, while stuff we need and want pretty much costs the same or just went up slightly. and it's because...

CHRISTOPHER: There's a stronger dollar. That makes consumer imports relatively cheaper.

CAPELOUTO: And for the second year in a row...

RYAN WANG: Gasoline prices are significantly lower.

CAPELOUTO: Ryan Wang is a U.S. economist with HSBC Global Research.

WANG: For the average household, that may be adding as much as $500 to $700 in terms of disposable income per year.

CAPELOUTO: All this, along with low interest rates, more access to credit and continued growth in jobs, had consumers spending more in June than they did in May by 0.6 percent.

ELLEN DAVIS: That's certainly good news for retailers as we gear up for the second-busiest shopping season of the year.

CAPELOUTO: Ellen Davis is with the National Retail Federation. The trade group for retailers estimates that the average family will spend $673.57 on back-to-school shopping this year. That's up roughly 10 percent from a year ago.

DAVIS: This year's back-to-school numbers indicate to us that even though families are really still looking for a deal and they're keeping an eye on promotions, there are signs that they're less worried about the economy than they have been in the past. Instead of buying one pair of jeans for your kids, you might be buying three pairs of jeans this year.

CAPELOUTO: Or a more expensive pair. People are also shopping longer for school supplies, she says.

DAVIS: You always hear about people waiting until the last minute. And an interesting finding from our survey is that people are actually starting back-to-school shopping this year a little bit earlier than before. If you're shopping over six weeks, you're probably going to spend a little bit more than if you're shopping over six days.

CAPELOUTO: Retailers in 18 states are also getting a boost this year from tax-free weekends meant to give families a break on their back-to-school shopping. Here in Georgia, that will start July 30. For NPR News, I'm Susanna Capelouto in Atlanta.

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