What Holiday Shopping Stats So Far Might Tell Us About The Economy

‘Tis the time for massive volumes of numbers detailing the particulars of consumers’ responses to gift buying. This year, that also incorporates uncertainty, inflation, and supply chain issues. So far, the results aren’t crushing by any means for retailers and the overall economy (which, let’s remember, is about 68% consumer spending). But they’re not that exciting, either.

A warning: the data is provided by companies that offer systems and information for retail supply chain or marketing management. Figure that colors the presentations and assumptions.

First up, Sensormatic Solutions, part of Johnson Controls JCI , which itself is big in technologies for buildings, energy, retail, and some other sectors. Its preliminary data on in-store shopping on Black Friday suggested a 47.5% increase over 2020, which sounds good until you remember that during a tough time in the pandemic, many people weren’t all that excited about being in crowds.

Sensormatic also has data comparing 2021 to 2019, the previous “normal” year. Shopper visits were down 28.3% from then. Visits to stores on Thanksgiving Day were down 90.4% from 2019. Which doesn’t seem necessarily a bad thing. But, even if no one in the business is saying, this is likely freaking out many in retail who have been looking to regular patterns for the holidays.

Adobe ADBE tracks online shopping and had expected spending on Thanksgiving Day to be between $5.1 billion and $5.4 billion, with the final coming in at the low end. Similarly, Black Friday, during which people spent $8.9 billion, was also at the low end of the predicted range and, interestingly, slightly lower than in 2020.

Both numbers are well up over 2019, with Black Friday hitting $7.4 billion and Thanksgiving Day, $4.2 billion.

A couple of possibilities speak to both the economy and many, though clearly not all, consumers worried about being in crowds, especially with news of the Covid omicron variant. An obvious one is to factor inflation into the analysis.

Costs have been rising, so is there any wonder that results might come in on the low side of estimates, especially when the practice of forecasting is to create an informational circus that the more comfortable can chew over? Using dollars as the measure, the numbers now mean smaller amounts of consumption than once might have happened. With the official measure of inflation, the consumer price index, running 6.9% since October 2020, maybe the number is more analogous to $5.1 billion less than 6.9%, or $4.74 billion. Then add another 1.2% of inflation in 2020, so a total now of 8.1%. That makes the $5.1 billion more like $4.68 billion, so much closer to 2019, with much of the growth due to inflation and not organic expansion.

Another possibility is that many people are still hurting financially from the pandemic crash. The worlds of finance and media often focus on medians or averages. If they seem to be in acceptable shape, then the prognosis is a strong economy.

Except, averages are usually top weighted, meaning that the fortunes of the financially fortunate at the apex of the socioeconomic mountain are so large that they pull the results up. Describe the economy by the average and you almost always automatically put lipstick on a rogue swine. Use the median instead and too easily people forget that half of the population does worse and half better.

Statistics can be powerful and useful, but still limited if people don’t pay attention to the distribution—the picture of how fortune, and the machinations of humankind, allot outcomes, good and not, among everyone.

Millions struggle with meeting rents that rise far faster than their incomes. At the end of September, consumers paid 10.5% more than the year before to obtain meat, poultry, fish, and eggs. It is expensive to just live for a large portion of the country.

Tracking of spending at the holidays ignores that issue. Granted, business affects jobs which have an impact on everyone. But public fascination is another distraction from what a broader view of the economy would provide. And that says quite a bit about where we are, fiscally and morally.