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On the radar: Sales tax holidays on the horizon, could help boost third quarter consumer spending

How will consumer spending shape up for the third quarter 2019? It remains to be seen, but I would anticipate that this week could provide a nice boost. The timing of the Independence Day observance on Thursday means that the subsequent weekend is a four-day one. For many consumers, the timing of the holiday offered a chance for a full week off while only using up 4 vacation days. As such, it means consumers will have plenty of time to travel, shop, and enjoy outdoor activities during a bout of hot — in some places stifling hot — weather.

As such, July should be off to a solid start and retailers will be offering abundant promotions to ensure it.

Amazon Prime Day — actually two days on the 15th and 16th — is another potential place where spending will get a boost. The online retailer’s deals will get plenty of competition from its rivals. Mid-month could help carry solid consumption in July.

And then there are the upcoming back-to-school sales tax holidays. There’s a few strays toward the end of the month (Alabama, Mississippi, Tennessee) while the majority take place the first weekend in August. Consumers like these holidays as a way to maximize their expenditures and are not necessarily restricted to spending on school clothes and equipment. State and local governments like these less for the loss of sales tax revenues, but it does provide a boost to businesses. In any case, the holidays could keep spending for some essentials and extras more elevated going into August.

And let us not forget to observe that many students put off buying items like clothing until the school year has started and they can check out what their fellows are wearing. So it is possible that at least for discretionary spending, the third quarter could be a good one.

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