The data being reported for the holiday shopping season all show it to be one of the worst on record. I hate to throw in a sour note on Christmas, but the actual situation is probably somewhat worse than the data show. Gift cards have become an increasing popular item in recent years. This is noteworthy because the gift cards themselves do not appear in standard reports of sales. The purchases show up when the gift cards are used, presumably mostly in January or February, or possibly even the end of this month. By all reports, gift card purchases are down by double-digit amounts from last year's levels. That means fewer goods will be purchased in the immediate post-holiday period. So, there is more bad news on the horizon in the retail story.
--Dean Baker