The Consumer Comes Roaring Back
Posted by Ray on November 29, 2009 under Main | 
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We keep hearing that we cannot count the consumer out and they will spend to support our robust 2.8% GDP growth we clocked in at last quarter. The experts all claim that same store sales are great, but they forget to tell you that most companies closed down tons of stores and Best Buy is benefiting from Circuit City’s failure. However, all the cheery news we are hearing does not jive with Black Friday’s relatively dismal sales.
According to the NRF consumers spend .5% more this Black Friday than last year, which sounds great, right? Not really. Considering a year ago we were on the “brink” or “abyss,” or any other term you want to use to describe horrible, sales were only up .5% when things were so good? I am sorry, but that does not fit with this strong recovery story being thrown down our throats like it is going out of style. If we were in a recovery or things were as good as we are being told sales would have been estimated to have been a lot higher than .5%.
Not only that, but who believes you get the best deal on black Friday? History has proven that the longer you wait, or buy online as most shipping is free, the better the prices get. On top of that, I did not hear one report of anyone getting trampled to death at Walmart, so I find it hard to believe sales were even up .5%. Not that I am rooting for anyone to get hurt or anything, but with a .5% print we should have seen some good pushing and shoving on the news, I got nothing up where I am.
While I do believe things are better I do not think they are nearly as good as being reported. Even David Rosenberg, who may not be the best market forecaster, but is one heck of a economist, is using the term depression to describe our current situation. I know, there are no soup lines, but here is what you need to remember about a modern day depression, we have unemployment, Social Security, food stamps, a whole variety of other public and private organizations dedicated to helping those less fortunate. In other words, this is not your grandparent’s depression.
Do I think we are really in a depression? If we are not it is very close to one and denying that is crazy. What else would you call 10.2% official unemployment, 17.5% U-6 underemployment? Considering U-6 is how we measured unemployment during the 1930’s I think 17.5% qualifies as a depression, but hey let’s not let facts or history get in the way of a great recovery story. I am a whole lot more optimistic than I was as long as other countries keep printing money as well, but the minute they stop and we continue I will be extremely pessimistic as that is when we head for real trouble. In fact, even with others printing money we are in trouble, but I digress. I believe in America and know we will get through this. However, if government does not get its act together and get out of the private sectors way, well, we will have soup lines again.
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