Economy: Are consumers more confident or just tired of austerity?
The surge in spending despite the shaky economy and uncertain future led many observers to wonder what to make of it all. Was it a sign that consumer confidence is growing, or did frugality fatigue lead Americans to load back up on credit-card debt? Here's hoping that it's the former. Rising consumer confidence works a bit like a self-fulfilling prophecy, spurring economic growth by boosting the demand for goods. But if it's the latter, then we've already forgotten the lessons that the recession supposedly taught us about household debt.
Or how about an alternative explanation? Perhaps the burst of spending is a symptom of the public's continuing unease about the economy. There's no question that people (and businesses) are sitting on a ton of cash. As my soon-to-be-former-colleague Tom Petruno wrote recently, "There is $8.6 trillion sitting in U.S. bank savings accounts and money market mutual funds, earning virtually nothing." So people had the wherewithal to spend, just not the will.
Perhaps they used the deep discounts offered over the four-day period as a chance to make purchases they'd defered. In other words, maybe they weren't splurging, maybe they were shopping opportunistically.
What do you think? If you were shopping over the weekend or online Monday, take our poll, leave a comment or both!
-- Jon Healey