If you believe everything you hear, then your anxiety must be through the roof right now knowing that the “Fiscal Cliff” is going to send our economy into another recession, the debt ceiling is going to crush our credit ratings with Moody’s and Standard and Poor’s, and then of course the world is going to end on December 21st. With Americans’ tendency to over-indulge on media fueled fear, it’s surprising to learn that most of us are carrying on with our tradition of splurging in holiday spending.
How much we spend and what we spend it on can be a good indicator of consumer confidence and the average household’s spending ability. This time of year can be especially telling as the last two months of the year account for about 40 percent of retailers’ annual sales numbers. Although the National Retail Federation (NRF) has predicted that there will be a slower growth rate for holiday sales this year compared to the last two, they still predict it will be higher than the average of the last 10 years.
NRF estimates that Black Friday weekend sales were $59.1 billion, which would be up almost 13 percent from 2011. Additionally, IBM’s Digital Analytics Benchmark estimated that Cyber Monday online sales were up 30 percent. It doesn’t appear that the fear of the “Fiscal Bluff” has slowed spending as of yet, but retailers’ share prices may take the brunt of that emotion if a resolution continues to move slowly. A particularly encouraging survey from NRF indicated that 8 out of 10 shoppers bought non-gift items over Black Friday weekend, and a Reuters/lpsos poll claims that only 59 percent of shoppers finished less than a quarter or NONE of their holiday shopping. Thus, we may still see sales increase as we get closer to the end of the year (or world). And if a resolution to the “Fiscal Bluff” can be reached sooner, rather than later, consumer optimism is likely to increase which could also have an effect on retail sales.
Estimates may not be great, but they aren’t bad either, and it doesn’t appear that the “Fiscal Bluff,” the possible credit down-grade, or the end of the world have dampened the American spirit of Christmas spending.