If the economy really is worse now than it was four years ago, as the Republicans have spent the last year telling us, why did a record number of Americans go shopping over the long holiday weekend and why did they spend nearly 13 percent more than last year?
All told, a record 247 million shoppers visited stores and websites over the four-day weekend starting on Thanksgiving, up 9.2 percent of last year, according to a survey of 4,000 shoppers that was conducted by research firm BIGinsight for the trade group. Americans spent more too: The average holiday shopper spent $423 over the entire weekend, up from $398 last year. Total spending over the four-day weekend totaled $59.1 billion, up 12.8 percent from 2011. [...]
The results for the weekend appear to show that retailers’ efforts to make shopping effortless for U.S. consumers during the holiday shopping season worked. Retailers upped the ante in order to give Americans more reasons to shop. Stores feared that consumers might not spend because of the weak job market and worries that tax increases and budget cuts will take effect if Congress fails to reach a budget deal by January.
Last week when I quipped that the idea that the imminent arrival of the “fiscal cliff” would stem consumer spending for the holiday was ridiculous, I was under impression that it was simply conventional wisdom emanating from the beltway. But if the Associated Press report is correct, and retailers really did fear that consumers would stay home because of it, I suppose this is a case of the “job creators” buying their own hype.
Going over the so-called “fiscal cliff” may impact the economy in a material way if lower income Americans see their taxes go up and budget cuts impact spending by local governments, but the idea that Americans would, or that they even should, preeminently panic over it and hide their money in a mattress is absurd. Because at a time like this, the last thing the country needs is lower demand. A lack of demand is what has prevented the economy from recovering in a more timely manner.
The prospect of cheap, discounted goods is clearly more luring to Americans than the idea of saving money for a rainy day. And with all things considered, it’s probably for the best that consumers haven’t bought into the hype and decided to go shopping anyway.
The lack of people hoarding their money gives President Obama more leverage at the negotiating table because it denies Republicans the opportunity to use depressed consumer spending to their advantage.