The Obama Recovery: Holiday Retail Sales Shoot Up

When in mid-November I wrote about retail sales climbing (and its relationship to jobs), I was met with a lot of skeptical eyes.  When I wrote about Black Friday sales and crossposted it over at Daily Kos, I was chided for talking up the economic recovery since, you know, Obama can do no right.  Well, it turns out that this holiday shopping season has continued the upward trend, sometimes even beyond the widest dreams of retailers.
Shoppers this year are gradually upping their spending, with sales increases in retail nationwide estimated as high as 5 percent from last year's relatively dismal Christmas shopping season. However, analysts say consumers are still treading carefully, as though the sluggish economy and lingering high unemployment are still holding them back.

"As we've gotten further into the holiday season, we've seen a continued positive shift that started back in October," said Doug Hart, retail and consumer expert at BDO Seidman in San Francisco. "In August, people were predicting a 2 percent increase in holiday sales over 2009. Now they're talking about anything from 3 to 5 percent, so things are trending better than the experts had initially expected."
The expectations are quite in line with reality and what's happening in retail shopping all over this country.  The Wall Street Journal also reported a sprinting increase in sales numbers compared to last year, focusing on Super Saturday numbers:
Chain-store sales for the week ended Dec. 18 rose 4.2% from the year-earlier period, the best performance in at least 10 weeks, according to a survey released Tuesday by the International Council of Shopping Centers and Goldman Sachs. On a week-over-week basis, sales gained 1.7%, also the best since at least mid-October.

Meanwhile, sales results for Dec. 18--Super Saturday, in retail-industry parlance--saw a 15% increase in sales with foot traffic running 10% higher, according to ShopperTrak.

That compared against a 16.5% drop in sales last year.
Just anecdotally speaking, I did almost no holiday shopping last year, and while I have been restrained this year as well, I have spent more than I did last year.  But is the increased spending a sign of the jobs engine beginning to be greased again?  It certainly seems that way.
Hernandez, an in-home caregiver, was barely able to find work in recent years, but now she's working 14 hours a day, seven days a week, caring for an elderly couple in San Jose.

"People are working more hours," she explained, "so now they're making more money and can hire other people to take care of their parents at home."

Her sister, insurance agent Myrna Hernandez, said her business has also been picking up as contractors, handymen and software engineers wanting to start new companies or revive old ones have been filing in for new policies.

"Last year, we were dead at this time," she said. "We've actually been busy this year."
Contractors, handymen and software engineers wanting to start new companies?  What's that thing called again?  Oh yeah, small business - America's jobs growth engine!  Those new businesses that are taking out insurance policies plan on providing products services to American households.  For which they going to need to hire employees.  That is, employees who will have money to spend and will be paying taxes.

Speaking of taxes, increased sales this year are also resulting in increased sales tax revenue for state and local government, easing some of the drastic service cuts states and cities have had to make this year.
When the National Retail Federation boosted their forecast sales increases for this holiday season from 2.3 percent to 3.3 percent, it boosted the hopes of state and local leaders. A 3.3 percent increase in sales over last year would mean an increase in sales tax collected.

"We thought this Christmas might be maybe 1.5 percent or 2 percent above last year. These are pretty extraordinary numbers," said Tom Clark, executive vice-president for the Metro Denver Economic Development Corporation.
Why, yes, these are indeed pretty extraordinary numbers, especially when you consider that we're just coming out of the worst economic slump since the Great Depression.  The increased sales tax revenue is not only expected to ease the budget tension that states are going through, but also give them better ways to attract business to um, create jobs.
"For the state of Colorado, looking at an $800 million to a $1 billion deficit, this will take a chunk out of it, particularly if it continues, and we have every reason to believe that it will," Clark said.

The improved health of state and local government budgets could also allow them to more aggressively pursue relocating businesses and the jobs that come with them.
So, to recap, the holiday sales numbers have been continued roaring this season, with prospects of new small businesses and thus jobs looking up, and possibly easing state budget shortfalls.  All this a mere two years from a near-complete meltdown of our financial system.  All this a mere two years from 750,000 jobs being lost a month.  All this a mere two years from having our economy suffer the worst recession in memory save for the Great Depression.

How did this all happen?  Did it all just happen by magic?  By "business cycle?"  By loud complaining?  I don't think so.  This all happened, to a pretty good degree, as a result of the policies pursued by this President and the Democratic Congress.  From economic stimulus to middle class tax cuts to extension of unemployment benefits to save and create jobs to reforming the financial system (Wall Street reform, student loan reform, credit card reform) to give the American people (who are also consumers) more confidence in our economy.  Triggered policies to help the middle class, the unemployed and the working poor work.  Not everything is peachy yet, but things sure as heck are significantly better for the economy than they were a year ago.  Mostly thanks to the Obama recovery.

Merry Christmas!

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