U.S. consumer confidence dropped in November to 70.4 percent, an inauspicious sign for businesses that rely upon boosted sales this holiday season. Down from 72.4 percent in October, this figure is a seven-month low. (Data is from the nonprofit research organization The Conference Board, which measures such statistics in America.) Despite these unfavorable findings, it remains to be seen whether end-of-the-year shopping is negatively affected.
Declining customer confidence unsurprisingly coincides with waning public trust in national lawmakers. Conference Board researchers logically believe the government shutdown in October may have led some citizens to form pessimistic views regarding employment and economic prospects. Americans also could be hesitant to spend as freely this holiday season due to concerns about the bungled Obamacare roll-out. (Can current health plans be kept? Will new plans cost more than originally advertised?)
Considering the frustrating, messy, hyper-partisan state of federal politics these days, it’s understandable that people may feel uncertain about the immediate future, to the point of shopping conservatively.
Diminished spending during holiday season, though, would hamper economic growth at a critical period. Naturally, businesses nationwide have come to expect pumped-up sales as the calendar year concludes. Customers holding back would mean an ill-timed lump of coal for bottom lines.
Or, the opposite may prove true during the next few months. Spending patterns do not always adhere to assessments of confidence. Americans sometimes will still shop in spite of low economic optimism — perhaps out of routine, perhaps as a pick-me-up. According to a Nov. 27 AP news story, even as consumer confidence shrunk in October, spending actually increased in certain markets. Gains were seen in restaurants, auto vendors and retail stores, especially for furniture, electronics and clothing.
This could be because, in general, national gas prices are down and hiring is up. Also, as gift-giving holidays approach, people may be more willing to open wallets for the sake of procuring presents. Which, of course, is not necessarily a bad habit, despite fiscal prudence individuals may exercise the rest of the year.
After all, come the holidays, we’re typically not spending extra on ourselves, but on others. And these annual purchases to show our appreciation for family and friends also provide a yearly elixir for commercial bottom lines. So, where it can be afforded, shop with confidence as 2013 closes out, for each present bought and wrapped is also a contribution toward the continued health of America’s economy.
This editorial recently appeared in the Record-Journal, Meriden.