Retail Sales And Winter: Economic Or Seasonal

Given that Black Friday weekend, including Thanksgiving itself, was uninspiring, the fact that the Commerce Department’s estimates for retail sales for all of November were again among the worst shows that Black Friday actually remains a pivotal part of the holiday setup. The trend has been to dismiss the traditional Christmas buying season kickoff as if earlier discounts might have the effect of boosting overall spending; spend less on Black Friday and the days around it so you can spend more in total?

Cannibalizing Black Friday weekend is just that, not a positive multiplier. Expecting otherwise just doesn’t make sense because people are going to spend what they are able, and the timing of the spending is incidental to their ability. Thus, the rather atrocious (yet again) spending estimates for November are commentary on that ability.

That is why there has been such a rush to “color” as much as possible any interpretations using the word “strong” or “solid” repeatedly, especially this year since retail and consumer spending didn’t just start to be recessionary in November. As an example, the National Retail Federation circulated its press release this morning, in light of the damning retail sales figures, which included internal contraction right at the start:

The first half of the holiday season is officially under wraps and it appears holiday shoppers in November were out in full force according to the National Retail Federation’s latest retail sales data, though on the surface, trends may appear softer than expected. However, according to NRF Chief Economist, the rise in November retail sales is actually very much in line with the events that are shaping the 2015 holiday shopping season. [emphasis added]

The title of the release is “First Half of the Holiday Season Shows Solid Growth.” Even the usual credentialed economist had to be careful in picking “solid” interpretations – after placing that description in the most benign-sounding context possible.