A Black Friday media frenzy over taser-wielding mothers and mall fist fights could not disguise a steep drop in retail sales over the holiday weekend.
According to the National Retail Foundation, Americans spent an average of $407.02 over the holiday weekend — a decline of nearly 4 percent from Thanksgiving weekend 2012, when shoppers spent an average of $423.55.
The National Retail Foundation (NRF), a 2,600-member trade association, put a good face on the slow sales weekend by noting that this Thanksgiving saw 141 million “unique shoppers,” more than the 139 million the group reported in 2012. The NRF releases Thanksgiving-weekend sales every year.
“More than 92 million people shopped (65.2%) for apparel, electronics and more, up from nearly 89 million last year,” the Foundation reported.
The retail report did not take into account the dire financial condition of Americans as another grim holiday season sets in. (Related: Black Eye Day: 2013′s best Black Friday fight videos)
According to Federal Reserve Flow of Funds data, household net worth in the United states in the first quarter was 70.3 trillion — less than $3 trillion more, in inflation-adjusted dollars, than it was at the start of the recession in 2007.
The sideways movement of household balance sheets also shows up in what is for most people the highest-ticket item they own. Nearly half of all real estate in the United States, 47 percent, is in the form of mortgage debt rather than equity — despite at least two years of reinflation of real estate prices. While the equity portion — the amount that homeowners own free and clear — has ticked up slightly thanks to the new real estate bubble, it is still near historic lows. In the early 1980s the equity portion was more than 70 percent.
With headline unemployment well above 7 percent and the labor force participation rate at its lowest point since 1978, Americans are barely staying afloat. (Related: Labor force participation rate lowest in 30 years)
A 2011 report by the National Bureau of Economic Research indicated that nearly half of Americans do not have $2,000 in cash or any reliable means of coming up with that kind of coin even with a 30-day head start. “Approximately one quarter of Americans report that they would certainly not be able to come up with such funds,” the NBER reported, “and an additional 19% would do so by relying at least in part on pawning or selling possessions or taking payday loans.”
NRF predicts a slight improvement in overall Christmas shopping this year. But despite a full-court pro-shopping press by Keynesian politicians and the establishment media — including stories that posit retail-store violence as just an over-the-top bit of holiday hustle and bustle rather than the symptom of a desperate and failing economy it obviously is — it’s hard to see how Americans growing steadily poorer, by nearly every measure, can deliver the long-deferred dream of a retail-driven recovery.
As holiday retail continues its years-long stagnation, the media have also ginned up “Cyber Monday” success stories, but this is another false hope. According to the Census Bureau, e-commerce makes up less than 6 percent [pdf] of retail sales.
NRF attributes this year’s disappointing sales figure to “low prices and aggressive discounts,” although discounting and price-cutting are part of every Christmas season, and both are designed to increase overall sales, not depress them.