Gallup: Christmas spending still 20% down from 2008

posted at 11:36 am on December 15, 2009 by Ed Morrissey

If last Christmas season was a disaster for retailers, 2009 looks like the Titanic.  Gallup reports that its survey of consumers shows holiday spending down 20% or more each of the last three weeks from the previous year.  Its job survey continues to show no improvement over 2008, either:

Self-reported consumer spending was down more than 20% in each of the last three weeks from last year’s depressed weekly comparables. At the same time, Gallup’s Economic Confidence and Job Creation Indexes were essentially unchanged. …

Gallup’s attitudinal economic data suggest that the Main Street economy continues to lack a lot of merriment this holiday season. Neither economic confidence nor job creation has shown much improvement during recent months, while consumer spending continues to trail significantly behind last year’s recession-depressed levels. This seems to comport well with the assertions of Dr. Christina Romer, chair of the president’s Council of Economic Advisers, on “Meet the Press” this past weekend that most Americans will continue to feel as though the country is in a recession until the jobs situation improves significantly.

On the other hand, Gallup data contrast with many economists’ optimistic reactions to recent government reports suggesting a slight decline in the unemployment rate last month and an uptick in retail sales. For example, White House economic adviser Larry Summers said “everybody agrees that the recession is over” this past weekend on “This Week.” He went on to talk about the usual progression from the return of economic growth to increased job growth after some period of time.

The economic science is “settled” at the White House, but not at the malls.  The National Retail Federation showed a 0.8% decline in top-line sales numbers between November 2008 and this November in its own survey, released last Friday.  It also noted that those top-line sales involved more discounting than usual:

As shoppers – and retailers – set their sights on the holiday season, low prices and pent-up demand helped entice Americans back into the stores. According to the National Retail Federation, retail industry sales (which exclude automobiles, gas stations, and restaurants) rose 0.6 percent seasonally adjusted from October and dipped 0.8 percent year-over-year. The numbers are in line with NRF’s forecast of a 1 percent decline in holiday sales.*

“Unlike last year, when the economic downturn caught everyone off-guard, retailers were able to plan ahead this holiday season with an eagle eye on low inventory and aggressive discounts,” said NRF Chief Economist Rosalind Wells. “Retailers are encouraged to see momentum building in sales as they prepare for the final ten days before Christmas. Although November sales were encouraging, companies know that the holiday season is far from over and expect this year to come down to its usual photo finish.”

A decline in top-line sales does not indicate a recovery, though, and the discounting means lower profits for a sector already struggling with too many locations and personnel.  A poor holiday season will force even more closures and cutbacks for some retailers, with the exception of the big discount stores, where customers have flocked.

On the day the NRF released this survey, our family trekked to the Mall of America, the largest retail mall in the US and usually all but impossible to access during the Christmas season.  We easily found parking on the entry level and saw what would normally be considered a decent crowd for a mid-year weekend afternoon.  The ease of shopping two weeks before Christmas spoke loudly about the reluctance of shoppers to part with cash this year, and made Gallup’s survey look very close to the reality on the ground. (h/t Geoff A)


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unseen on December 15, 2009 at 12:51 PM

Other than the environmentalist, kook fringe, AGW freaks is there another reason for the US not to become an energy producer? That’s big enough, but I’ve been wondering if the fact that Canada is our largest trading partner is one of them. I’m not clear at all on this, but we do import most of our oil from our northern neighbors.

Would appreciate any insights.

Cody1991 on December 15, 2009 at 12:57 PM

Now only if state and federal governments thought reducing debts and deficits were good things (and not via taking more of our money).WashJeff on December 15, 2009 at 12:10 PM

If they reduce their debt, that puts their cushy jobs pensions at-risk. Can’t have that.Government: the ultimate in ‘pee on your leg and tell you it’s raining’ mendacity.

venividivici on December 15, 2009 at 12:57 PM

I agree. But raising interest rates in a fragile economy is a delicate task.

Bleeds Blue on December 15, 2009 at 12:49 PM

It is. That task is made more difficult than it should be since the Fed has been saddled with maintaining a growing economy. A role that IMHO it should not have. It sole purpose for existence should be to maintain a stable dollar (i.e., a dollar today should purchase roughly the same stuff ten years from now). If this was their single concern, raising interest rates want be easier. Blame for growing economy would fall even more to the people the create the taxes, laws, and regulations that effect the health of our economy.

WashJeff on December 15, 2009 at 12:58 PM

ed continues to celebrate bad news for America.

sesquipedalian on December 15, 2009 at 11:56 AM

“This war is lost”

Democrat Harry Reid celebrating bad news for America, 2006.

“4,000 soldiers dead in Iraq”-Democrats celebrating a milestone only they were interested in, 2006.

Soros needs to get you some better talking points, kiddo.

Del Dolemonte on December 15, 2009 at 1:01 PM

You never get what you want or need, and you end up buying junk that they didn’t really want or need. Nobody ends up the better for this orgy, but we all end up poorer for it. The whole exercise is a huge net loss, not only to us as individuals, but to the country. China is the prime beneficiary.

keep the change on December 15, 2009 at 12:32 PM

I disagree. We’re big on practical gifts in the house. My husband is getting out of the Navy soon, and needs a suit. Just got back from buying a dapper pinstriped one (and a few shirts/ties). Kids are getting pjs/jeans (growth spurt). Sure, there are some fluff items, like a few toys, but the kids don’t have many of those anyway. I have a feeling that practical gifts are quite the rage this year.

I do agree about the China thing, for those people who don’t pay attention to that sort of thing. We try to avoid Chinese-made toys when possible – which is pretty easy when we buy from local merchants who make them by hand. The kids’ bikes might end up being Chinese, I’ll have to google that.

Anna on December 15, 2009 at 1:05 PM

20% down? you’re looking at it wrong.

We’ve still got 80% of the economy we had last year… and 80%, dare I say it? That’s a B there.

Maybe with some grade inflation it could even get a B+ as advertised.

You’d have to lose over 40% of the economy year over year to rate a failing grade… that’s just simple mathematics.

Don’t ask me what the increases year over year under Bush were… I’m not sure what to call a grade over 100%… I think he was cheating.

gekkobear on December 15, 2009 at 1:13 PM

Would appreciate any insights.

Cody1991 on December 15, 2009 at 12:57 PM

One of the main reason the oil companies are not fighting harder for more domestic drilling is the costs. Both in labor and environmental regs. It costs saudi arabia about $2/bll to pull it out of the ground. In the USa it costs about $10/bll. therefore it is in the oil compaines best interest to drill outside the USA, ship it to the USA then to drill here.

Only when the price of oil gets to a certain price (I think its above $50.00/bl does it become less of an issue.

But when oil was selling for $10.00-$20/bll the oil companies closed oil wells in the USa and explored for oil across the globe to get a cheaper product. that was how they found the Nigeria oil fields etc….

until it becomes uneconomical to ship oil to the USA we will continue to “put off” massive energy drilling/policies. The environmentalists are holding sway at the moment because it helps the oil companies, gives dems money and votes, and it is not causing a major crisis in the USA atm. the $4.00/gal gasoline showed that the environmentalists lose much power when energy prices go up. If it becoem more expensive to ship oil to the USA then it is to drill for it here the environmentalists would be placed on the sidelines. I think.

unseen on December 15, 2009 at 1:23 PM

One of the main reason the oil companies are not fighting harder for more domestic drilling is the costs. Both in labor and environmental regs. It costs saudi arabia about $2/bll to pull it out of the ground. In the USa it costs about $10/bll. therefore it is in the oil compaines best interest to drill outside the USA, ship it to the USA then to drill here.

unseen on December 15, 2009 at 1:23 PM

Could you be a little more specific about what aspects of labor and environmental regs are making it cost more? I notice that the theme of “teh evil lawz make XXX MOAR EXPENSIVE!” is very common from conservatives, but specifics are often lacking…

Not to say that there aren’t a plethora of stupid laws the nation over, but I’d find it hard to imagine that we’d want early 1900s conditions to return.

Dark-Star on December 15, 2009 at 1:29 PM

unseen on December 15, 2009 at 1:23 PM

Thanks. I think the cost per bbl for Canada to mine the tar sands was $60/bbl. Once that was a given they went full swing.

Hmmm…. need to do some research. There has to be a tipping point for the US.

Cody1991 on December 15, 2009 at 1:35 PM

Just wait until I start doing my Christmas shopping and that number will shoot right back up to normal! Just kidding, though my credit cards will get a workout between now and Christmas.

Until the overall jobs picture picks up, which will take a couple of years, retail sales will be below “normal” as people fear losing their jobs and sock away a little more cash than they normally would. Once jobs come back, spending will follow.

Snidely Whiplash on December 15, 2009 at 1:37 PM

One of the main reason the oil companies are not fighting harder for more domestic drilling is the costs. Both in labor and environmental regs. It costs saudi arabia about $2/bll to pull it out of the ground. In the USa it costs about $10/bll. therefore it is in the oil compaines best interest to drill outside the USA, ship it to the USA then to drill here.

unseen on December 15, 2009 at 1:23 PM

True to some extent, but don’t forget that the US doesn’t have much cheap oil left. Saudi, Russia, et al have large pool reserviors near to the surface, which is what makes truly cheap oil. The undeveloped US fields are deepwater and shale, which are much more expensive to extract. What the US still has in spades is natural gas.

The US laws that really impinge on oil exploration here are those that limit where drilling can take place, and the permitting process that can take many years.

Vashta.Nerada on December 15, 2009 at 1:42 PM

Not to say that there aren’t a plethora of stupid laws the nation over, but I’d find it hard to imagine that we’d want early 1900s conditions to return.

Dark-Star on December 15, 2009 at 1:29 PM

Some of the cost is just due to the type of fields that are being drilled also. saudi arabia is like an ocean of oil. which means less labor intensive drilling, less piplines, less workers etc to get the oil.

some of the tax laws that increas elabor costs are social security and medicare. which when an american company leaves are shore they save 18% in labor costs just by no longer having to pay those taxes. The regulations include the clean air, clean water act, endagered species act (polar bear etc). Local and state environmental regulations and taxes play a role also.

When given the choice of bribing one dictator or confriming with a mulititude of local, state and national politicians and regulators most choose to bribe the dictator.

This does not even begin to address the actual pay difference in labor between local workers. Where a $25-30/hr wage in TX seems reasonable that same job might be done in Nigeria for $5.00/hr.

this is why if the government is serious about keeping our standard of living and our wages the only weapon they have is tarrifs. there is just too much of an economic incentive to offshore jobs, resources etc because of the total mess the governemnt has made of its regulatory and taxing authority in this country.

unseen on December 15, 2009 at 1:48 PM

Vashta.Nerada on December 15, 2009 at 1:42 PM

agreed

unseen on December 15, 2009 at 1:49 PM

20% down? you’re looking at it wrong. We’ve still got 80% of the economy we had last year… and 80%, dare I say it?
gekkobear on December 15, 2009 at 1:13 PM

Exactly: In the past 12 months, Barak Obama has “saved or created” eighty percent of the American economy.

That’s a B there. Maybe with some grade inflation it could even get a B+ as advertised.

You’d have to lose over 40% of the economy year over year to rate a failing grade… that’s just simple mathematics.

gekkobear on December 15, 2009 at 1:13 PM

No, I’m pretty sure Obama grades himself on a curve.

If the economy drops 20% every year between now and 2012, he will still continue to award himself the title of America’s First Honor Student President.

logis on December 15, 2009 at 1:49 PM

Hmmm…. need to do some research. There has to be a tipping point for the US.

Cody1991 on December 15, 2009 at 1:35 PM

the oil shales in CO and montan become economical at around $70.00/bll The Canada ones are aorund $50/bl if I remember coreectly

unseen on December 15, 2009 at 1:50 PM

Vashta.Nerada on December 15, 2009 at 1:42 PM

Another point. That is why ANWR is so imprortant to the oil companies and the energy equation. It is one of those large pools that can be tapped rather economically compared with other permits or lots of land the oil companies have in holding.

unseen on December 15, 2009 at 1:53 PM

he oil shales in CO and montan become economical at around $70.00/bll The Canada ones are aorund $50/bl if I remember coreectly

unseen on December 15, 2009 at 1:50 PM

We’re close, then. I understand the difference/difficulty in extracting our resources as opposed to Saudi.

What will be the tipping point? $4+/gal gas was scary especially when the recession was looming. It’s like a Mexican stand off. What’s going to crash first, and will we see things deteriorate to the point where people become angry and desperate?

Sorry, guys. I find this situation to be very disturbing and frightening. People can only be pushed so far, and we have no leadership in DC. In fact, I would say many of the polls show a complete lack of confidence in government – and this isn’t a ‘party’ thing.

Cody1991 on December 15, 2009 at 2:03 PM

Cody1991 on December 15, 2009 at 2:03 PM

i have no idea I reached my tipping point a long time ago when they passed the seat belt law

unseen on December 15, 2009 at 2:09 PM

unseen on December 15, 2009 at 1:53 PM

Definitely, which is why opposition to ANWR is so foolish.

Vashta.Nerada on December 15, 2009 at 2:22 PM

i have no idea I reached my tipping point a long time ago when they passed the seat belt law

unseen on December 15, 2009 at 2:09 PM

I hear you. My tipping point was was the day I needed light bulbs and found nothing but those stupid, curly things in the store. I muttered, “Ph$ck, GE!” and walked out the door.

Cody1991 on December 15, 2009 at 2:25 PM

Definitely, which is why opposition to ANWR is so foolish.

Vashta.Nerada on December 15, 2009 at 2:22 PM

but it does say alot about the real reasons for the opposition. If the environmentalist really wanted to reduce environmental degradation it would be logically to support one big oil field instand of 50 to 100 small oil rigs spread aorund the state or country to get the same amount of oil.

therefor eit isn’t about the environment. It is about driving up costs, killing our economy and taking us back to the horse and buggy

unseen on December 15, 2009 at 2:25 PM

The Saudi’s are lying about their oil reserves. They are nearing the end of their ‘easy’ oil just like what happened in Texas and other parts of the US. They (SA) have claimed increased reserves various times in the last 30 years, but they haven’t announced any new fields, only increased reserves. I read an article about it within the last two weeks and it made sense to me.
The problem is going to come when Saudia Arabia can no longer produce the amount of oil they are currently producing and other countries can’t or won’t make up the difference. You can’t drill oil wells or extract oil from oil sands in one day. It takes an extended period of time to produce oil and we are not planning ahead for this occurrence.

TruthToBeTold on December 15, 2009 at 2:30 PM

The economic science is “settled” at the White House, but not at the malls.

Yep, “GREEN SHOOTS EVERYWHERE”. In your dreams Barry, in your dreams.

GarandFan on December 15, 2009 at 2:31 PM

20% down from a horrible year. Great job there, Barry.

Jaibones on December 15, 2009 at 2:41 PM

Hey, but I hear from WLS radio in Chicago that some lefty poll has 40% of Americans believing Crap and Tax will provide us with more jobs.

Or something.

Jaibones on December 15, 2009 at 2:42 PM

TruthToBeTold on December 15, 2009 at 2:30 PM

Please don’t fall for that Peak Oil nonsense. Those guys have been making predictions for the last 20-30 years and they have been wrong every single time without fail. They make a few dozen predictions every year and without fail, everyone of them are wrong.

Johnnyreb on December 15, 2009 at 2:47 PM

You can’t drill oil wells or extract oil from oil sands in one day. It takes an extended period of time to produce oil and we are not planning ahead for this occurrence.

TruthToBeTold on December 15, 2009 at 2:30 PM

Gah, the “10 year” foolishness! Don’t even get me started…some of my own family apparently can’t grasp the idea that if you never start doing something it never will get done in 10 more years!!!

Dark-Star on December 15, 2009 at 2:59 PM

Could you be a little more specific about what aspects of labor and environmental regs are making it cost more? I notice that the theme of “teh evil lawz make XXX MOAR EXPENSIVE!” is very common from conservatives, but specifics are often lacking…

Not to say that there aren’t a plethora of stupid laws the nation over, but I’d find it hard to imagine that we’d want early 1900s conditions to return.

Dark-Star on December 15, 2009 at 1:29 PM

Imagine, for a moment, how well labor unions fare in Saudi Arabia.

TheUnrepentantGeek on December 15, 2009 at 5:37 PM

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