This Christmas, shopping is setting new records. In a slow growth economy, retail sales are off the charts(up 6.7%, on-line up 10%). The fear of a double dip recession is long past. This is the spending shot, the demand, the positive buying spree we are all looking for; so I say thank goodness., but trouble lie ahead. Consumer are buying on debt and not saving.
Unemployment has dropped thanks to a jump (50K [BLS]) in retail hiring in November. On a personal side note, I still can't get quick service at Wal-Mart, Starbucks or my local gas station. I guess this is a good thing. This is the demand we are looking for. All of the current liberal economists say we must increase demand to bring down unemployment. Demand increases both investment and short term consumption, both of which create jobs. But keep you eye on investments, capital and labor hiring, the sure sign of a positive business outlook.
We are out of the woods, but long-term, we may be at the limit of growth through material consumption. We are looking at a new frontier where demand is for services and experiences. The hospitality and entertainment industry are growing and construction is shrinking. We are spending on healthcare, entertainment, comfort and security not bigger homes, cars are TVs. We are materially satisfied.
Right now, even the poorest have a basic level of physical level of comfort. We have a car, TV, refrigrator, stove and clean water. We may not have personal security or quality education but we have a microwave.
We also have a safety net. We have unemployment insurance, TANF, and social security. No longer do the elderly suffer. But we must look ahead and see where the future demand will come from. Then we can position ourselves as Black people and as a country to meet this future demand. It is the only way to bring unemployment down long term.
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