Projections are holiday harbingers

There’s optimism amid economic uncertainty

By The Mercury

It’s beginning to look a lot like… autumn, Halloween and the home stretch of the 2012 election. Yet artificial Christmas trees have sprouted at some local stores and enough national projections about holiday sales and hiring have surfaced to remind folks that Christmas is as much a year-round occasion as an annual celebration.

One can’t help but wonder if the annual holiday spending projections, issued just as the weather turns, are timed to put people in a spending frame of mind. That’s not easy to do in an economy that’s sending as many mixed messages as ours is. Joblessness remains stubbornly high, and food and gas prices are rising. On the other hand, housing is improving, the stock market is elevating the balances of millions of Americans’ retirement accounts and consumer confidence has been rising for most of the year.

Complicating the outlook in the coming months is uncertainty about whether Congress and the president will achieve a budget deal to prevent the combination of spending cuts and tax increases that some fear could throw the economy into another recession.

Shoppers aren’t alone in their uncertainty. Retailers find themselves doing some high-stakes guessing about a season that has a disproportionate impact on their bottom lines. The Christmas season generates about 40 percent of annual sales, and even that can be misleading. Heavily discounted prices can lure customers, but deep discounts can erode profits.

As it happens, the National Retail Federation expects Americans to spend 4.1 percent more this “holiday season” than we did last year. That sounds impressive, and it’s more upbeat than the projection of the International Council of Shopping Centers (up 2.9 percent), but it’s smaller than the increases the last two years.

When holiday spending rises, so does hiring, and though the jobs are temporary, they’ll still be welcome. Retailers nationwide are expected to hire about 600,000 people, an increase of 6 percent from last year. That helps.

Certainly we hope that shoppers will find what they’re looking for and that local stores prosper in the months to come. We also hope than when local families sit down to outline their budgets for Halloween, Thanksgiving and especially Christmas, they make a point of setting something aside for those in our community who are out of work or whose income falls short of what they need to make ends meet.

The days to come will be more rewarding if everyone can enjoy them.

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