When the sleigh and reindeer land on roofs across American this holiday, the gift bag will be filled with home heating oil and mortgage bills. Santa is bringing a recession for Christmas.
According to The Wall Street Journal, "The National Retail Federation predicts the smallest gain in holiday retail sales since 2002." That would take spending up 4% to $474.5 for the last two months of 2007. And, no one will be surprised if that number slips.
Aside from hammering shares of retailers like Wal-Mart (WMT) and Target (TGT), the slow holiday is almost certain to throw GDP expansion into the red. If Santa cannot do it on his own. spiking energy prices and falling home values are in the wings waiting to help.
Retail sales are almost all that is left of the long economic boom. Car sales and home sales began to die earlier this year. Business spending has not been robust, and is likely to tail off. Growth in new jobs is beginning to fade.
Get out the sweaters. It is time to save money on heating. The winter will be especially long this year.
Douglas A. McIntyre
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