Holiday Shoppers May Forecast Early 2009 Economy
Dec 1st, 2008 | By Dawn Rivers Baker | Category: EconomyLast week, the Commerce Department announced that the economy contracted a bit more than originally estimated during the third quarter of this year. Naturally, that has made a lot of people very nervous. Right now, all eyes are on the 2008 holiday shopping season as the closest thing to real-time economic indicators as we are likely to get, because the third quarter saw a steep drop in consumer spending and consumer spending makes up 70% of the U.S. economy.
Taking the broad view, there is cause for cautious optimism. Consumer confidence is up and gas prices are down. Those two facts may well counter ongoing bad news on the unemployment front as well as that decline in consumer spending. Early returns from the Black Friday shopping weekend are promising, as shoppers hit the stores in droves, driven by low prices and pent up demand. The question now is what happens if the Treasury Department follows through on its plan to increase liquidity in the consumer credit market? Will consumers, made wary of credit by the events of the last few months, ignore a newly unfrozen credit scene? And if so, what will that do to our consumption-oriented economy? The way the holiday shopping season shapes up may provide our earliest clue.
