The National Retail Federation is predicting holiday sales will increase four percent this season, but Iowa State University economist David Swenson says he has “mixed views” about whether Iowa retailers will see that much of a gain.
Significant gains in the ag sector bolstered Iowa’s economy for the past few years, but Swenson says the decline in commodity prices will prompt Iowans who are dependent on farm income to “be more circumspect” about their holiday spending their year. Swenson also points to the two percent increase in the payroll tax as another damper on the potential increase in retail sales, since congress did not extend the tax break first enacted in 2010.
Public opinion polls taken in Iowa during the election season indicated a majority of Iowans believe Iowa’s economy is headed in the right direction. However, exit polls found 79 percent of the Iowans who voted in this year’s election are worried there may be a recession ahead in 2015.
