The name “Black Friday” is given to the day after Thanksgiving, when hordes of shoppers charge to — and charge at — stores to buy Christmas presents or to find bargains for themselves. For many retailers, this day marks the point in the calendar year when their bottom lines begin tipping toward black with profit, the first time since the previous year’s Christmas season. It’s a critical few weeks for retailers.
But as the national economy continues to recover from a historically deep recession, Black Friday invokes a darker meaning. The worst is probably behind us, but its memory — and uncertainty about the direction of the federal government on a jobs bill and debt reduction — may still haunt shoppers from Wall Street to Walmart.
Sitting around the Thanksgiving table yesterday, grumpy old Uncle Harry may have lamented days when people saved money to buy new furniture, electronic equipment and clothes rather than borrow through a credit card to pay for today’s purchases. The double-edged sword of needing consumer spending to goose the economy toward robust growth while worrying that people are borrowing their way toward insolvency still hangs over us.
The gross domestic product has trended toward a reliance on consumer spending at an accelerating pace in recent years. Consumer spending as a percentage of GDP held steady at about 63 percent until 1980, when it began to grow. In 1990 it was 66.2 percent, in 2000 it was 68.6 percent and in recent years has held steady at about 70 percent. The remainder of the economy is linked to business investment (16 percent), government spending (19 percent, one-third of which is defense spending) and net exports.
Surveys show that Americans may open their wallets less widely this year than last.
The annual holiday survey by the accounting and financial services firm Deloitte found that Americans plan to spend an average of $395 on Christmas gifts, down from $488 last year. Fifty-nine percent planned to spend the same or more this season, a drop from last year. Forty-eight percent plan to buy gifts at discount stores. Fifty-eight percent of American households believe their financial situation is the same or better than last year.
This mixed bag of consumer confidence, though trending toward optimism, may make this Friday after Thanksgiving more gray than black.
A new wrinkle in the shopping season is this year’s Small Business Saturday movement, urging consumers to patronize their downtown stores the day after Black Friday’s mall blitz. Given a growing trend toward buying online, small, family-owned businesses certainly can use a boost.