The impasse in Congress over the “fiscal cliff” could be the Grinch that steals Christmas if it isn’t resolved soon.
A record 247 million shoppers visited stores and websites over the four-day Black Friday weekend, up 9 percent from last year, according to the National Retail Federation. They spent an average $423 this year, up 6 percent from last year, for a total of $59 billion.
Even without the uncertainty over a $500 million wave of tax hikes and spending cuts set to hit paychecks Jan. 1, retailers face some major challenges this holiday season.
With unemployment stuck at nearly at 8 percent, millions of households are without paychecks. Still reeling from last month’s Superstorm Sandy, millions of hard-hit households have had to dip into savings to clean up and rebuild. (Based on insurance data from previous storms, as much as half of the estimated $50 billion in property losses may have been uninsured.) Spending on lost household furnishings and damaged homes will divert funds that would otherwise have gone to holiday shopping.
Spending may also fade this holiday season because, continuing a decade-long trend, retailers kicked it off even earlier this year. Some consumers have already spent all or part of the money they budgeted for the holidays.