If Christmas shoppers seem more confident this year, there is good reason for it. Consumers are not as deep in debt as they were at the beginning of the year. Credit card debt, in particular, has fallen by about one eighth, according to one credit industry estimate.
The increased confidence doesn’t mean consumers can spend more, however. Part of the reason credit card debt is down is that so many people have stopped using their credit cards for purchases. Paying cash for Christmas gifts, they won’t be tempted to spend more money than they have.
This may be part of the reason Christmas shopping dropped off so drastically and so immediately after the Black Friday rush. Many workers will get two more paychecks between Black Friday and Christmas, however, so they could return to the stores on any given weekend. That effect was hard for me to see this past weekend, however. I saw plenty of traffic on the highways on Saturday and, especially, Sunday, but I never did figure out where all the cars were going. None of the retail parking lots I saw looked busy.
Retailers may be trying new strategies to counter the newly named “early December lull,” but they are also lowering their expectations. I didn’t see extended hours in any store this past weekend, and if there was extra staff in the store, it wasn’t obvious. It may be now that the Christmas rush consists only of Black Friday itself and the eight days before Christmas. If so, it will also be less wearing on retail workers, who will have two or perhaps three normal weeks to recover from Black Friday.
This also means that the December boost in employment will be disappointing this year, making the seasonally adjusted employment numbers for November look better than they really are and the numbers for December, worse than they really are. We must not be alarmed if the December employment report appears to show an economy in contraction. The trend to notice is not a change in direction for the economy, but a change in the meaning of the seasons.