MSM organs such as CNBC exult that this Black Friday, the day after Thanksgiving, Americans went on a shopping binge, pushing retail sales to a record $11.4 billion, an increase of a whopping 6.6% from last year!
Over the Thanksgiving holiday weekend, 226 million Americans — half of the U.S. population! — went shopping, racking up a record $52.4 billion in sales!
Alas, neither the average income nor savings rate of Americans commensurately increased by the same 6.6% rate. On the contrary, Americans’ personal savings rate recently dropped to pre-Great Recession level, from a 2011 high of 5.3% in June to 3.6% in September. At the same time, the average U.S. income was just barely above unchanged at 0.1%, the lowest number since the Great Recession began back in December 2007.
All of which means that as far as the economy is concerned, the consumer is just getting worse and worse off. To make matters worse, our assets are greatly reduced because our homes are getting cheaper by the day.
Here are some other facts and figures about Black Friday which are sobering:
- Revolving consumer credit, which excludes cars and colleges, continues to contract.
- There’s more self-gifting than last year: Mike Thielmann, group executive vice president at J.C. Penney, noticed that while “Americans are still worried about jobs, still worried about the economy,” shoppers were buying gifts and for themselves.
- There was more purchasing in discretionary categories: 51.4% of spending went to clothing and accessories. Thielmann said that jewelry “was selling well.”
- Men outshopped and outspent women.
In other words, the portrait of Black Friday 2011 is that of a people who are self-indulgent and in deep denial about their finances.
The average American hasn’t made more money this year, is saving less, but spending more. Although a new poll by CBS News shows 50% of Americans are concerned they can’t afford Christmas presents this year, Americans still managed to buy gifts for themselves (“self-gifting”) and buying items that are non-essential.
Tyler Durden of ZeroHedge says that what really caught his attention was that this year’s black Friday weekend’s sales broke records, with the Black Friday weekend in 2008 being “second best.” But Thanksgiving 2008 happened just after a nearly 400 point plunge in the S&P in two months, which leads him to wonder if this Black Friday’s record buying will prove to be the harbinger of a second Great Recession.