Thanksgiving looms with plenty of storm flags. The HSBC China Manufacturing Purchasing Managers Index showed its biggest drop since March 2009, in the depths of the recession. A debt auction by the German government, with the strongest economy in Europe, drew the weakest demand since the introduction of the euro. Consumer spending slowed, growing by just 0.1 percent in October. The Federal Reserve announced new stress tests for major banks (we may get more of a sense of exposure to Eurozone contagion). And Pimco’s Mohamed El-Erian called U.S. economic conditions “terrifying.”
Otherwise, the holiday shopping season is shaping up to be hunky-dory.
Beware the early reports. They’re almost always wrong. It usually takes until January to get real data on how retailers performed in this most important selling season of the year. We know millions are strapped, unemployed, underwater and continuing to face a historic debt overhang. This, plus the economy continuing to slow, with third-quarter GDP growth revised down from 2.5 percent to 2 percent.
What we don’t know: How many better-off Americans will continue to spend, especially on luxury goods, and whether even high-debt customers will open up a little for the holidays. The Eurozone will remain a major danger zone through the season. And the prospect of slowing in China adds to the black swans, or turkeys.
Even so, have a happy Thanksgiving.
And Don’t Miss: The Eurozone debt web — who owes what to whom || BBC News
Today’s Econ Haiku:
Here comes Black Friday
With most of us in the red
Pull out that Visa