Despite seeing headlines of frantic scrambles for bargains, pepper spray attacks in stores, and police brutality meted out to shoplifters, analysts say Black Friday may not have been quite so black in terms of the economy.
The Commerce Department reported that American’s spare cash was up 0.3 percent in October. Also that the most recent Thomson Reuters/University of Michigan survey of consumers also indicated that consumer confidence increased 3.2 points, to 64.1, in November.
To add to the positive news, the National Retail Federation estimates a 2.8 percent retail sales increase in November and December. Economic forecaster and consulting firm, IHS Global Insight, likewise indicates holiday retail sales 4.2 percent higher than last year’s $453 billion.
If the average American has more spare change in their pocket for the holidays, they could really help our economy when they spend it. This consumer activity could be a much-needed boost to what is still a sluggish economy.
This doesn’t mean the good times are just around the corner, but nowadays we take every piece of good news when it comes. This is no exception.
The sales and offers available in stores and on the internet on Friday led to a slight increase in spending as consumers clamored to get bargains. The aforementioned fracas involving stores and shoppers behaviors where thankfully the exception rather than the rule, but it illustrated our hunger for a deal.
Particularly, small businesses and private retailers saw a much needed boost in spending. This has reinforced the trend that has slowly been emerging over the past months. Consumers appear to be favoring smaller, local businesses rather than their huge publicly-held rivals. This has seen a lifeline thrown to the small business owner that has been well received.
“This movement reflects an increased move toward consumers supporting the local business community, more personal interaction, and more comfort in a smaller shopping environment,” says Mike Lubansky, a senior analyst at Sageworks.
“Some of that growth could just be a rebound effect and some of it could be due to this buy local, smaller retail response. As far as whether that trend will continue beyond that, it’s hard to say,” says Lubansky.
Of course, numbers are only part of the story. It’s how the average consumer feels about their future that really counts. The inability for our political leaders to come to an agreement over spending has shaken our confidence in them considerably. That will, in turn, affect our confidence in the future recovery and directly on how much of that spare change we spend and how much we save.
All we can say for certain right now is that sales were up slightly at the weekend and that any significant recovery is going to be dependent on Washington getting their act together and agreeing a plan for our future.
Without a firm agreement on how best to reduce spending and cut the deficit, the average consumer is going to remain cautious unless there are bargains to be had.




November 30th, 2011
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