Black Friday spending reports

Last Friday was the biggest retail profit day of the year. It's called "Black Friday". Why "Black"? Financially speaking, if you're 'in the black', that means you are recording a profit. Conversely, if you're 'in the red', that means you're recording a loss. It is somewhat nice to see a profit recorded amongst the plentiful losses going on in the current credit markets (see www.ml-implode.com: Countrywide losses, Citigroup losses, etc).

Informationweek reports:

"ComScore found that online spending rose 22%, to $531 million, compared to last year, while Thanksgiving Day spending online rose 29% to $272 million. The company found that shoppers have spent more than $9.3 billion since Nov. 1."

This is all fine and good, apparently. The potential problem here is that companies have normally used the Black Friday spending as a bellwether for retail spending over the holidays, thoughout the Christmastime season.

However, given the recent investor scare on Wall Street, the successive Fed rate cuts, and credit market crises, the increased spending reports could mean that consumers are watching their budgets more and being more picky about how much they spend this Christmas season.

I would argue that instead of increased holiday sales, you will still see quite a bit of buying, but it will largely be done over the Internet (where you can typically get stronger buys) and will not be as spectacular as forecasters predict. I think that last Friday's strong sales reports show that the consumer is watching their budget more carefully and is not as confident in the economy as some would have us think.

All in all, though, as goes with every bit of financial forecasting, this must be taken with a grain of salt. No one can accurately predict the financial future everytime. Who knows how the spending will go this season? One would like to think that consumers might actually present gifts of savings accounts to their children, stocked with $100-200 earning an interest rate of 4.75% like you can find at Emigrant Direct (www.emigrantdirect.com) ...but maybe that's asking too much?