Black Friday Retail Sales

The best news of this shopping season comes from the quiet guys behind OPEC, who brought the price of oil back into the 60s, instead of pushing it up into the $100/bbl bracket. That would not have made for a Merry Christmas for you, me, Ben Bernanke, nor the equities markets.

Last year, spending was all about Refis and how much money was looking to be spent. This year, it’s all about oil.

Even at these lower levels, the real costs to the economy, vs. its prior $14-$23 average, are disastrous – or wonderful, if you live in Venezuela, Saudi or Kuwait. I marvel at all of the micro analyses, done daily, of what is moving the markets up and down, when you know that there is a monster shift underway that makes all these “talksters” even more irrelevant than usual.

I mentioned, in my newsletter, the recent study that found something like an 87% correlation between the inverse of oil price, and U.S. market performance. Enough said; I mention this for any separate audience in the blog world.

The results from Black Friday and Saturday, now in, are not surprising on their face; sales up perhaps 3.5% YTY, with sales at Wal-Mart actually down a fraction of a percent. A new study out today noted IRS collections on income showed income in 2004 still lower than in 2000, by about 3%.

While some retail consultants have declared some kind of weird victory in the new figures, I see a pretty moribund consumer market (and yes, the Michigan consumer index fell this month). People have never been in more personal debt, and with less hope of finding a high-paying job (will someone please find a way of segmenting McJobs and real jobs in the jobs report?).

E-commerce is up, no surprise, but it remains such a small fraction of all retail that it can’t provide much in the way of overall optimism.

We could put lipstick on this pig, but why bother? You’ll also note enterprise hardware sales, just out for October, were down YTY by over 20%; so perhaps this is more than a consumer problem.

One must always first identify the problem, in order to fix it.