Despite larger crowds in stores on Black Friday, analysts said it may not indicate significant economic recovery.
“Black Friday is only one piece of the puzzle,” National Retail Federation spokesperson Ellen Davis said. “You could have the best Black Friday in the world but the rest of the season wouldn’t match up and that’s what happened in 2008.”
According to the National Retail Federation [NRF], a record 226 million shoppers turned out for the Thanksgiving weekend sales this year, which is 14 million more than last year. The same report from the NRF showed that average consumers spent over nine percent more than last year, and the total amount spent was $11.4 billion. This was roughly $1 billion more than last year.
A recent survey conducted by Bankrate.com seems to concur, painting a glum picture of consumer behavior. The survey found that only 13 percent of Americans feel more secure in their jobs than they did a year ago and that a full 42 percent said they planned on spending less during the holiday season this year. Only 10 percent of those surveyed said they would increase their spending.
With nine percent unemployment and gas prices at historically high levels, many consumers have been feeling the squeeze on their wallet. It is possible that the high sales statistics from Black Friday do not reflect an increase in overall holiday spending, but a change in consumer behavior. Consumers may be choosing to take advantage of low prices on Black Friday by doing their entire holiday shopping on that day, then cease to buy anything for the rest of the holiday season. This is what occurred in 2008 when there was a very successful Black Friday but a dismal holiday season.
Many economists dismiss the importance of the holiday shopping season, claiming that it tends to offer few surprises and little wisdom as to general economic conditions. William Goffe, an economics professor, said in an email that “most economists think that the emphasis on the Christmas season is overrated.”
Goffe explained that the $11.4 billion in sales on Black Friday account for less than one-tenth of one percent of GDP, and that the overall outlook for the economy has not changed.
“The economy is slowly struggling back from the effects of the Great Recession of 2007-2009,” Goffe said. “Many likely don’t know that the recession has ended. While the economy is indeed growing, it is growing so slowly that employment is still down some 6.5 million from its peak.”
While some are hopeful that the positive numbers from Black Friday weekend could be the harbinger of a recovering economy, Goffe offered caution, stating that “The outlook for the next year or two is pretty much more of the same as there are no obvious reasons for economic growth to pick up.”