Even the most casual observers would believe that the U.S. is making an economic recovery if they saw the hordes descend upon retail stores on Black Friday.
Americans began lining up four hours before the stores opened as early as midnight. And they weren’t shopping just for necessities. Sale of large-screen TVs and video games were up significantly from two years ago. The consumer Electronics Association predicts a 4.1 percent increase in sales over a year ago.
About a third of all American adults shopped on Black Friday, up from slightly more than one-fourth of all Americans a year ago, according to analysts from Goldman Sachs.
These Americans spent about $10.7 billion in retail stores, slightly more than last year, according to research analysts at ShopperTrak. Sales for the four-day weekend, beginning Thanksgiving, were about $45 billion, according to the National Retail Federation (NRF). But, overall sales were pushed by online purchases. PayPal reports that online sales increased 27 percent on Black Friday from a year ago. Overall, retail and cyber sales are expected to increase 2.3 percent from 2009, to $688.9 billion this year, according to data from the NRF.
But, Black Friday spending isn’t the only indicator of a recovering economy. The non-partisan and impartial Congressional Budget Office (CBO) reports that the Recession that began in 2007 probably ended late last year.
Overall, the economy is up 2.8 percent in 2010, according to the CBO. Bloomberg, Wells Fargo, and Morgan Stanley, plus dozens of others who track the economy also show at least a 2 percent increase this year, with at least a 3 percent increase next year. Even the conservative Wall Street Journal points out the economy is up 2.5 percent, with a 2.8 percent increase predicted for 2011. The National Association for Business Economics, analyzing data collected by 51 professional economists, notes the gross domestic product grew about 2.7 percent this year, and will rise 2.6 percent next year.
In related data, the Dow Jones average, which plunged at the end of the Bush–Cheney years, is up about 10.5 percent in the past six months. The CBO reports that although unemployment is hovering at 9.6 percent, without the Obama Administration’s stimulus plan, unemployment would be between 10.4 and 11.6 percent. By the end of 2011, unemployment is expected to drop to 8.7 to 9 percent, according to several major analysts, including the Wall Street Journal.
Since December 2009, employment in the private sector has risen by 1.1 million, according to the Bureau of Labor Statistics. About 2.5 million jobs are expected to be added in 2011, according to the American Bankers Association’s Economic Advisory Committee Unemployment, according to the ABA, should decline to about 8.5 percent.
But, there are still almost 15 million unemployed, most of whom saw their companies downsize or send jobs overseas. At the same time that Congressional Republicans blocked extending unemployment benefits, they have protected the wealthiest 2 percent of Americans. Under the Obama plan, individuals earning less than $200,000 a year would continue to receive the Bush-era tax cuts. The cost to protect the rich would be more than $3 trillion over 10 years. It appears that President Obama, under heavy political fire, will yield to the Republicans, who campaigned heavily on a promise to cut spending—except for their own special interests, of course.
Related to the unemployment problem, more than a million Americans, will lose their homes to foreclosures. The sub-prime mortgage crisis began when government regulators and the Bush–Cheney Administration disregarded numerous warnings and then fell asleep while financial institutions became even more greedy between 2006 and 2009, and lured millions into a false sense of security.
Overall, America is slowly on the path to recovery. But, to those who lost their jobs and then their homes, it just doesn’t seem that way.