Economy Watch: Holiday Sales More Robust This Year?
- Nov 29, 2010
November 29, 2010
By Dees Stribling, Contributing Editor
Was Black Friday, which is now the unfortunate name for the day after Thanksgiving in U.S. retail, all it’s supposed to be this year? That is, in terms of kicking off a holiday shopping season better than the tepid 2009 (up 0.4 percent from the year before, according to the National Retail Federation) and the positively gloomy 2008 (down 3.9 percent from 2007)?
Anecdotal evidence suggested that shoppers were excited to spend this year, and the NRF noted that indeed things are looking up for retailers: This year’s Black Friday sales were up 8.7 percent from 2009, including both bricks-and-mortar as well as online stores.
Predictions for entire holiday sales season are all over the map. The NRF forecasts a 2.3 percent increase year-over-year–not bad, but not stellar. Other holiday-sales predictions range from more than 4 percent up to flat, which would be a disappointing bust for retailers. Then again, according to the U.S. Department of Commerce last week, consumer spending was up 2.8 percent in 3Q10 compared with the same quarter last year. That’s the largest increase in consumer spending since 4Q06, so presumably there’s some momentum going into the holiday season this year.
Foreclosure Takes a Long Time
Lender Processing Services Inc.’s October Mortgage Monitor report, released just before Thanksgiving, found that U.S. foreclosure inventory is now at an all-time high. As of the end of October 2010, foreclosure inventories are 7.4 times historical averages and still rising, the report noted.
Also as of the end of October, homeowners facing foreclosure have quite a long time before they actually are obliged to move out: an average of 492 days, in fact, which is more than 16 months. A year ago the equivalent time period was 382 days, and some homeowners–“home dwellers” might be more fitting term at that point–are experiencing even longer periods before eviction. Of borrowers that have not made a payment in two years, LPS says, more than 18 percent are still not in foreclosure.
Lenders have been foreclosing as fast as they can in recent years, of course, but it hasn’t been fast enough considering the volume, and now there are delays related to the corners lenders have cut (namely, hiring robots). Even though the raw number of households in severe delinquency is going down–8.4 percent year-over-year in October, says LPS–it’s unlikely that the foreclosure pipeline will be any less crowded for quite a while.
Portugal Says No Thanks, Like Ireland
While residents of the United States were celebrating Thanksgiving and Black Friday, residents of Portugal were wondering whether their government was going to ask for a bailout. Various Iberian ministers say Portugal doesn’t need it, which sounds a little familiar, since the Irish government was saying the same in the week before the EU and IMF bailed it out.
Wall Street, which counted Friday as half a trading day, experienced some losses on the day after Thanksgiving. The Dow Jones Industrial Average was down 95.28 points, or 0.85 percent, while the S&P 500 and the Nasdaq were off 0.75 percent and 0.34 percent, respectively.