News about the most important season for the retail industry follows a predictable pattern: initial forecasts of robust sales, confused but generally optimistic noise as holiday shopping gets underway, the beginning of doubts at the end, followed by disappointing reality come February.
I make no predictions. But here are six charts that show us where we stand.
1. Retailers have posted record profits since the end of the Great Recession. Obviously this isn’t every retailer or your beloved neighborhood shop that went under:
2. Individuals have paid down a good deal of debt. That leaves them with some leeway to spend more this season:
The caution is that Americans still carry a historically high level of debt. According to a new report from the New York Fed, total household debt was nearly $12 trillion in the third quarter. Of that, $3 trillion is non-housing debt. Student debt was $1.13 trillion compared with $260 billion in 2004.
3. Unemployment is down but still high. Yes, the “official” unemployment rate was 5.8 percent in October. But when you count the part-timers who want full-time work, along with those who have given up actively seeking employment, the situation looks like this:
This is the best we’ve seen in the recovery, but still very high by historical standards.
4. Wages continue to stagnate or decline for most workers. The result: Even Wal-Mart and dollar stores have been struggling.
5. Consumers are “confident.” The Thomson Reuters/University of Michigan Surveys of Consumers showed confidence in November at its highest level since July 2007. This (trailing) composite of consumer surveys paints a more nuanced picture and gives some context:
Have a great Thanksgiving.
Today’s Econ Haiku:
Is OPEC in charge?
We’ve got Saudi Dakota
The climate is fracked