Doing my best to help the struggling global economy

December 15, 2011

COLUMNS, NEWS

The retail season started with a bang, as traditional retailers added 6.6 percent to their sales from last year. Online retailers are picking up steam that is fueled not just by improvements in economic trends. More and more, we are shopping from our computers. While the big shopping day for traditional retailers is Friday, the big day for online shopping is Wednesday, from 8 to 5. Yeah, we’re shopping at work! Online retailers saw an increase in sales over Thanksgiving of 24.3 percent. Expectations are that their sales will increase by about a third for the entire season.
But I thought we were in a recession, and the world was coming to an end at any minute. Maybe that’s why our credit card balances are creeping up. After all, if the world is coming to an end, just put that new dress on the card. The day of reckoning will never arrive!
Consumer spending drives our economy. It comprises about 70 percent of the GDP. We don’t spend when we are scared, and there have been a lot of frightening things out there in the last few years. Lately, though, the fear hasn’t had a basis. That is starting to show in our current Christmas season.
Consumer confidence is still weak but is gaining with each passing month. We’re following through on that improvement in attitudes by heading to the shopping malls. A good retail season in 2011 will make for a good 2012. Spending follows gains in consumer confidence. Business confidence follows spending. Hiring follows business confidence. The stock market follows hiring. And round and round we go.
So, watch for the final numbers on Christmas, 2011. They will tell us what to expect in 2012.
Gotta go! I’m watching my bid on Ebay, and I have to order a few gifts before the free shipping coupon expires on another site. Did I mention I’m on a first name basis with my UPS man? Hey, I’m just trying to help the economy!

Nancy Lottridge Anderson, Ph.D., CFA, is president of New Perspectives Inc. in Ridgeland — (601) 991-3158.  She is also an assistant professor of finance at Mississippi College. Her e-mail address is nanderson@newper.com, and her website is www.newper.com.

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