If You Can’t Say Nothing, Say Something Bad
More and more I suspect that is the catch phrase of the media today. The New York Times is indulging in wailing and gnashing of teeth because spending this Christmas is only up 3.6%. Only? Had the reporter gotten a 3.6% raise, he would be doing a happy dance down Broadway.
American consumers, uneasy about the economy and unimpressed by the merchandise in stores, delivered the bleak holiday shopping season retailers had expected, if not feared, according to one early but influential projection.
Spending between Thanksgiving and Christmas rose just 3.6 percent over last year, the weakest performance in at least four years, according to MasterCard Advisors, a division of the credit card company. By comparison, sales grew 6.6 percent in 2006, and 8 percent in 2005.
“There was not a recipe for a pick up in sales growth,” said Michael McNamara, vice president of research and analysis at MasterCard Advisors, citing higher gas prices, a slowing housing market and a tight credit market.
Strong demand at the start of the season for a handful of must-have electronics, like digital frames and portable GPS navigation systems trailed off in December. And robust sales of luxury products could not make up for sluggish sales of jewelry and women’s clothing.
What did eventually sell was generally marked down — once, if not twice — which could hurt retailers’ profits in the final three months of year. “Stores are buying those sales at a cost,” said Sherif Mityas, a partner at the consulting firm A.T. Kearney, who specializes in retailing.
MasterCard’s SpendingPulse data, scheduled to be released Wednesday, cover the 32-day period between Nov. 23 and Dec. 24. It is based on purchases made by more than 300 million MasterCard debit and credit card users and broader estimates of spending with cash and checks. It encompasses sales at stores, on the Internet, of gift cards, gasoline and meals at restaurants.
The final numbers are in line with MasterCard’s already modest expectations, which were reduced in the middle of the season. But retail analysts and economists, who scrutinize holiday spending for clues about the health of the American economy, are unlikely to be impressed by the results.
Despite higher fuel costs – which impact all prices across the board – the sales still grew at 3.6%. I'd wager that there are economies on this planet that have not seen growth like this in a decade – but the media is desperate to flog a story about a disaster. Even if they have to make one up.
We have heard, pretty much endlessly, that housing is a disaster, that credit is a problem. Yet there is still evidence that the economy is growing. Just not fast enough to suit some analysts. And just slowly enough that a reporter can make a sow's ear out of a silk purse.
By Sam L., December 25, 2007 @ 11:44 pm
Hey! Penguin candles!! Super Festive!!! Good on ya!!!! (Dang, wore out that exclamation mark key.)
By Quilly Mammoth, December 26, 2007 @ 12:45 am
What effect did having half the plains states without power have?
By Straight, December 26, 2007 @ 5:59 am
Jeez! We get gloom and doom from the msm about not saving enough (feedthepig.org,etc), now we’re not spending enough.
By feeblemind, December 26, 2007 @ 8:45 am
I suspect that if there was a dem pres in the White House, the media would be trumpeting the 3.6% increase as evidence of a booming economy. Spin spin spin.
By Mwalimu Daudi, December 26, 2007 @ 10:35 am
It would appear that this is not the first time that Michael Barbaro, the author of the article, has tries a similar spin. And it would also appear that the MSM suddenly wants to stop talking about Iraq and instead dust off the “worst economy since the Great Depression” campaign slogan in order to boost Democrats’ chances next November. The facts must always give way to the Narrative in MSM-land.
By martian, December 26, 2007 @ 1:58 pm
I think Mwalimu has hit the proverbial nail on the head, at least one of the nails. We’ve got a Clinton running for the White House, so dust off the “It’s the economy, Stupid!” signs that worked so well for the last Clinton.
feeblemind has managed to find another nail – if the MSM actually said something like the “Despite higher fuel costs – which impact all prices across the board – the sales still grew at 3.6%. ” stated by Gaius, then they would be admitting that the Bush administration might be doing something right in regard to the economy. Can’t have that! They have spent the last seven (almost) years doing their best to make the Bush handling of the economy look like a disaster. Show me one week in the last seven years when there hasn’t been at least one news story about how bad the economy is – if you can find one (you won’t).
The simple fact is that our economy, on 9/11/2001 took it’s biggest and most dangerous hit since the “Black Tuesday” (October 29, 1929) while it was in the middle of a downslide that began during the last year of the Clinton administration. Yet, within a year the downslide stopped, turned into an upswing, and the economy (and jobs) have been growing every since then. The MSM has reported none of this and has tried to turn every gain into a negative (they’re not good enough jobs, housing isn’t growing fast enough, etc.).
By SJohn, December 27, 2007 @ 12:13 am
Actually, if you leave out food & fuel, the sales grew only 0.6%. And that’s not adjusted for inflation.
And of course, we’re talking sales, not profit. The Times article also makes mention of the fact that a large part of the sales were in “loss leader” items, which are sold at or below cost.
So, yeah, pretty sucky sales season.