If you are looking for signs of demand in the economy, the Thanksgiving weekend provided some hope.
Spurred by aggressive promotions from retailers, American consumers opened their wallets over the holiday weekend in a way they had not since before the recession, setting records in sales and traffic.
The National Retail Federation said Sunday that spending per shopper surged 9.1 percent over last year — the biggest increase since 2006 — to an average of almost $400 a customer. In all, 6.6 percent more shoppers visited stores on the Thanksgiving weekend than last year.
It also looks like the housing collapse is bottoming out. Those are very hopeful signs. It could be that the economy is going to start improving just in time for election season.
So, what better time for Europe to destroy its economy and send the world back into a global recession?
Boo – the black Friday numbers aren’t to be relied upon:
No, Black Friday Sales Were Not Up 16% (not even 6%).
And the best long-term analyses I’ve seen say that just by the sheer numbers of houses left on the market, rate of construction, etc. the housing market won’t really bottom out in real terms (inflation adjusted terms) until around 2014-2015. Here are [one, two] depictions of this.
And finally, it’s not just Europe imploding – the U.S. was already slowing down significantly many months ago – well before the Eurozone mess really started heating up:
Worrying about oil prices
Will high oil prices bring a new recession?
ECRI’s Achuthan discusses Global Industrial Growth Downturn
Sorry to be a downer…
Not to mention that credit card use is up. Meaning more debt. And that consumer confidence number, it’s only back to where it was in July.
And even that won’t last long with gas prices at all-time record seasonal highs.
And speaking of BR, he just made a great point on his blog about the consumer confidence number. It ended November 15th, which means right before the recent market dive(though it also doesn’t include yesterday’s sharp move higher).
I can’t help but believe that the vast majority of these purchases were made on credit cards and that people will, once again, be building up debt that they cannot pay off in a reasonable period of time. Was it just pent up frustration at deferring all the fun stuff for so long and they just couldn’t take it any more? Time to spend, spend, spend!!! Credit card rates are still very, very high. I know the retailers really need a shot in the arm during this holiday season, but the fact is that a lot of these shoppers will still be paying for this years purchases come this same time next year.
Why we can’t have nice things…It’s the contradiction at the heart of American democratic governance and it turns all Democrats into hypocrites no matter what their personal commitments are.
There is no more sadder example of the entrapment that money exerts than this:
Here’s the really galling part about that tweet. A large chunk of that money, maybe even as much as half, will go to media companies that promote Republican politicians and memes for free.
Oh yes, $35,800 a head is probably too pricey to mic-check. The social order will not be disrupted.
Name: Maryland Real Estate
Website: http://greetingsvirginia.com/realty/maryland-homes.php
It is good news, the country is slowing getting away from recession, I hope Us will fully revive its economic status soon enough.
I hope one day Boo or somebody will explain to me why it’s good news that spending is up when income is flat or declining. Spending would be good news if it reflected more money in peoples’ pockets, but in this case it clearly doesn’t. Isn’t that the definition of a bubble?
It is good news that spending is up because it justifies all the retail folks who were put on for the holidays. They will have additional part-time retail hours in expectation of greater traffic after Black Friday. They will be able to be a little less tight on their Christmas budgets, even if it is the food they get for the relatives for Christmas Day. And it ripples through the economy.
It is mildly good news. A consumer collapse on Black Friday would have indicated a start of the collapse of credit card debt. That is the real bubble right now; all those compound-interest assets carried on the books of credit card companies that bear no relation to the creditworthiness of their customers. At some point, a large enough segment of the population is going to call BS on credit card company rates of over 20% APR. It’s loan sharking at best and fraud at worst (a audit of the credit scoring algorithms might show this).
But the BF spending was based on credit card debt, since income has not significantly increased.
Yep. Most likely. But:
GDP = Consumption + Business real Investment + Government spending + (Exports – Imports)
So C goes up, BI is a wash, G for now is a wash, and E-I for the Christmas season is negative. But E-I to deliver the goods for the Christmas season likely was booked this past summer. So it is for November-December essentially a wash.
GDP = NI so more income available to distribute — good.
In the next round, what will determine how good is how much of that money goes into consumer spending, government spending, an business investment in the domestic market. That is, not shunted into savings of exported in exchange for additional imports.
Sign me up for “trillions of Euros in new money,” please.
Like, yesterday.