https://thehill.com/policy/finance/overnights/3718770-on-the-money-retailers-predict-record-holiday-sales-amid-inflation/

Retailers anticipate holiday sales could reach new records this year, as inflation remains stubbornly high. We’ll also look at former President Trump’s recent comments fanning some flames around the simmering debt ceiling drama, an economic update from White House chief of staff Ron Klain, and more.  

🎤 But first, Taylor Swift, the wedding ruiner

Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter?

Record holiday sales predicted as inflation soars

Holiday retail sales are set to grow between 6 and 8 percent this year, according to an estimate from the National Retail Federation (NRF), as inflation remains stubbornly high.  

Spending from Nov. 1 to Dec. 31 could total as much as $960 billion, a record-shattering figure, showing that consumers continue to spend even as inflation hits their wallets. 

  • While the bulk of the anticipated sales increase will be driven by higher prices, NRF noted that volumes are expected to continue to rise as well.  
  • NRF president and CEO Matthew Shay said that spending by higher income individuals remains strong, while less wealthy households are tapping into their savings or taking on debt to buy products.  

“We feel generally very positive that consumer fundamentals will continue to support economic activity, despite the record levels of inflation and rising interest rates,” said NRF chief economist Jack Kleinhenz.  

The Fed won’t like that: The Federal Reserve on Wednesday issued the fourth straight 75 basis point interest rate hike in an effort to reduce consumer demand so that high prices don’t become entrenched, but Americans are still spending. 

Karl has more here

NO PLACE LIKE HOME 

First-time homebuyers are getting older as prices rise 

The age of first-time homebuyers climbed last year while their share of the market fell to an all-time low, according to data released Thursday by the National Association of Realtors (NAR). 

  • NAR’s 2022 Profile of Home Buyers and Sellers showed that first-time buyers, whose typical age rose to 36, made up 26 percent of the market from July 2021 to June 2022, down from 34 percent a year earlier. 
  • Meanwhile, the median age of homebuyers is on the rise, moving up to 53 from 45 last year. Adults between the ages of 55 and 74 accounted for the largest share of homebuyers in the housing market in 2022. 

“We also know that first time homebuyers have to save for a down payment and closing costs in an environment of high inflation with rising rents while still having student loan debt and being able to pay that down as well as credit card costs or childcare expenses,” said Jessica Lautz, NAR vice president of demographics and behavioral insights.  

Adam Barnes explores the trend here

WHAT RECESSION?

Klain says US not in recession: ‘I want to be really, really clear on that’ 

White House chief of staff Ron Klain on Thursday said that the U.S. is not in a recession and argued that the economy is strong following the Federal Reserve’s decision to again hike interest rates. 

“We are not in a recession. I want to be really, really clear on that,” Klain told MSNBC when asked what the White House is doing to prepare for a possible recession. 

  • Klain noted that the U.S. is seeing a 50-year low on unemployment overall and an all-time low on Hispanic unemployment.  
  • He also said the stock market is strong and noted that it’s still higher than at any point under former President Trump. 

Alex Gangitano has more here

Read more: Fed Data suggests there was no recession in September 

IMPEACH MITCH?

Trump: ‘They ought to impeach Mitch McConnell’ if he backs debt ceiling elimination 

Former President Trump says that Senate Minority Leader Mitch McConnell (R-Ky.) should be impeached if he backs a plan for the debt ceiling to be eliminated over fears that House Republicans could cause the U.S. to default on the nation’s credit. 

“It’s crazy what’s happening with this debt ceiling. Mitch McConnell keeps allowing it to happen. I mean, they ought to impeach Mitch McConnell if he allows that,” Trump said Thursday. 

  • Members of the Senate and House cannot be impeached, though they can be removed with a two-thirds vote in both chambers. 
  • Thirty-one House Democrats, led by Rep. Brendan Boyle (D-Pa.), signed a letter calling for a debt ceiling elimination in the coming weeks, though McConnell has not signaled support for such a move. 

The Hill’s Al Weaver has more here

Good to Know

Week-over-week, Kentucky saw the largest drop in unemployment claims in the country, according to a new analysis from WalletHub.  

The large drop seen in Kentucky was accompanied by decreases in New Hampshire, North Carolina, Arkansas and Tennessee, respectively. Overall, a total of 25 states saw total unemployment claims last week lower than those reported the previous week. 

Other items we’re keeping an eye on: 

  • The online payment giant Stripe is laying off around 14 percent of its staff, according to a memo sent to staff Thursday from CEO Patrick Collison. 
  • President Biden on Thursday said that 16 million Americans who applied for the student loan debt program will be approved by the end of the week, the last step before they begin receiving forgiveness checks. 

That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow. 

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