Surging holiday sales

Today’s edition of the New York Times is reporting a rise in this season’s holiday sales.  Specifically the International Council of Shopping Centers is expecting holiday sales to be up 3.5-4.0%.  Separately, ShopperTrak reported that traffic was up 3% and that the total dollar value of sales this past weekend, the last before Christmas, were up 5.5%.  In absolute dollar terms this is up $18.83 billion.

You may have shopped online this year.  If so you contributed to the 12% rise in online sales this holiday season.  Total online sales are estimated by comScore to be $28.36 billion this season.

Analysis: Because consumer spending is usually around 70% of gross domestic product these figures are good news for the U.S. economy.  Hopefully the upsurge in spending by people will increase the confidence of businesses enough to induce them to begin hiring new employees and spending some of those mountains of cash accumulated over the last two recessionary years.  Perhaps the “game of chicken” that was a major blog theme this year (see https://jasonapollovoss.com/web2010/07/20/a-game-of-chicken/) is coming to an end.

However, a longer running theme, and frankly a more important one is the emergent thrift of the U.S. consumer.  By thrift I mean a population of folks who live within their means and not beyond them.  For the long-term health of the U.S. economy we need a nation that, at worst, spends only what it earns and not more.  It is possible to live in a world where the consumer is the back bone of the economy, but that consumer also is thrifty.

Importance grade: 8.5; this surge in sales will buoy the confidence of U.S. retail businesses.  Yet, it remains to be seen if that will snap them out of their “lock down” on new employee hiring.  If so, then this holiday season will turn out to have been just what the economy needed.

Jason