Interesting piece in Politico about how even with all the shopping activity that has taken place over the past few days, there are signs that “America’s economic engine is still at risk of losing steam.”
Here’s the rationale:
“Prior to the weekend, the National Retail Federation’s annual survey projected a whopping 182 million people would shop online or in stores over the holiday weekend. The Wall Street Journal reports that foot traffic climbed compared to last year, and Adobe Analytics found that online spending on Black Friday climbed by more than 7 percent compared to last year, pushing total sales close to $9.8 billion. Today’s sales are poised to make Cyber Monday the year’s biggest shopping day, with spending projected to land at around $12 billion.”
Ana analysis of the sales, however, suggests that much of the activity was driven by discounts. “What’s more, the use of ‘buy-now, pay later’ options — which enable people to pay down purchases in installments — surged by more than 70 percent over the past week, according to Adobe. That likely means more consumers are facing financial constraints…”
KC’s View:
They may be facing financial constraints. Or they may simply feel like they are facing financial constraints.
The actual numbers suggest that the economy is improving. Unemployment remains low. Inflation is dropping. Gas prices are lower than in the recent past. And while clearly there is some distance to go – food prices may have stabilized, but they’re not falling – the economy certainly seems to be in a lot better shape than anyone expected a year ago. (Hardly anyone seems to be talking about recession anymore.). And there have been a number of stories about how individuals feel like their economic situation is improving, but feel like the overall economy is not.
Perception may not be reality, but it certainly can dictate reality.
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