The National Retail Federation reports that consumer spending this holiday is at a five year low. The fact that the hottest toy of this holiday season is under $10 is among the indicators that people are spending less than in years past. Spending on Black Friday and online is up slightly this year over last, but many analysts believe consumers may be holding out for better deals. To this end, retailers are preparing for a so called Super Saturday, hoping shoppers will come out in force the last Saturday before Christmas.
CNBC’s Steve Liesman reported that the majority of Americans feel pessimistic about the economy. A CNBC “Wealth in America Report” found that middle to lower class Americans plan to spend less this holiday and feel that the government, particularly the President, is doing a lousy job of repairing the economy. As banks thrive and repay the TARP funds from the stimulus package, Americans want that money to pay down the deficit rather than be spent on more stimulus packages.
For his part, President Obama has expressed public outrage at the banking industry. He invited the heads of the country’s biggest banks to the White House to scold them about their lending and compensation practices. In response, banks are repaying the TARP funds to minimize any leverage the government has to mandate changes to executive pay packages. Although, Bank of America has pledged to help the economy by lending $5 billion to small businesses next year.
Unfortunately, it still all comes down to jobs. Most Americans feel like the stimulus package helped the bankers keep their jobs, but did little for the average American. While the Treasury Department and the Federal Reserve point to indicators that show the economy is making a comeback thanks to the government stimulus, most Americans can point to someone they know who is unemployed or going through foreclosure.
The unemployment rate at 10 percent is probably not a truly accurate reflection of just how many Americans are out of work. Considering how long this recession has gone on, many Americans have been unemployed for over a year and have given up looking. The way the unemployment rate is calculated doesn’t factor in people who have given up looking for a job or those who are working part time because that is the only job they could find. The Bureau of Statistics and Labor calls this U-6 unemployment and puts that number at over 17 percent. That’s a much higher percentage of Americans with little money to spend and prospects looking bleak for the new year.