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Happy Christmas, Happy New Year

The holiday has come. If you’re safely tucked in to your warm winter bed the last thing you may want to think about is shopping. If it ain’t done by now, well, it may not be done. It’s all good. But that is what defines the season for many people and the success of it determines whether or not visions of sugarplums dance in your head about now.

Even if you’re not into the whole rush-rush buying frenzy, a good strong retail season is good for everyone. We can say that this year because if you’d rather think back on the blessings of the year, as any righteous person should, this has been a very good year for the economy. All that remains is for people to accept it and move forward with glad tidings of the season. The shopping sesaon, that is.

Happy shoppers make for a happy Christmas.

Happy shoppers make for a happy Christmas.

We don’t have the results for “Super Saturday”, the last Saturday before Christmas, but anecdotes tell us that it was at least as good as “Black Friday”, if not a bit better. Small stores in particular seem to be doing very well as people search for that perfect gift – the thing that you can’t get anywhere else. That’s a mark of happy shoppers in a good mood, and that’s what we need more than anything.

Locally, Grand Avenue has been lit by red tail lights and glistened with car exhaust every night for at least a week. The spendy shops along it appear to be doing very well.

The National Retail Federation is sticking by their 4.3% gain after the full results for November showed a solid 3.6% gain over 2013. It was hampered by bad weather and a general feeling that it wasn’t Christmas yet, so it was very much in line with predictions. People aren’t bargain hunting as much as before, and that’s the good news.

Low gas prices make people happy.

Low gas prices make people happy.

Why are people so happy? Low gasoline prices are an extra bonus that no one was counting on, but the net gain of over 2.6M jobs in the last year is certainly a help. There isn’t upward pressure on wages yet, so we can’t call this a boomtime. We have a few years to wait before people have good reason to feel very happy with their lot.

But that is certainly coming. This was a year full of great stats but not very good feelings. Christmas should be the time when that changes.

With headline unemployment at 5.8%, down 1.2% over last year, more people have more to spend. That in turn boost retail, who then has more to hire and spend. It all goes around like good cheer and hopefully carries over into 2015 with milder weather and a lot of reason to be optimistic.

This is what the “velocity of money” is all about – how many times a buck turns over in the economy. It’s been crashing hard as the Fed printed more and not much was happening – but with the Quantitative Easing over and a general turnaround we may have reached the bottom.


The broadest measure of Velocity of Money, as MZM.


It’s still not good, with money turning over 1.4 times a year (8.5 months) versus the 2.3 times per year (5 months) you’d expect in a healthy economy. But it is a start, and we should be thankful for it. Is that a bottom we’re painting? Only the new year can tell us, but there is reason to believe it is.

So as we all count our blessings in 2014, for many people there are more around them than last year. That’s a good thing. As we go into 2015 we need to make a few resolutions and predictions for the year – and this is where it will start.

Have a great holiday and may your blessings continue to multiply!

7 thoughts on “Happy Christmas, Happy New Year

    • A strong economy? No problems wishing for that. It’s been far too long, especially for those who work hard for a living. It really has been 14 years since they received their share of the fundamental promise of our culture, “A good days’ pay for a good days’ work”.
      That’s my Christmas wish this year – that we live up to our promise.

    • U-6 Unemployment, the most comprehensive measure, fell from 13.1% to 11.4%, meaning something like 2.4M people have seen their economic condition improve – about the same as the net number of jobs created, meaning that the labor force is not growing (retirements equal young people over 16 coming in).

      Long term unemployment, 15 weeks or more fell from 5.8M to 4.2M, a net improvement of 1.6M people. That shows that the job gain is mostly absorbing the long-standing problem with long term unemployment that’s been haunting us since 2008 and to some extent even longer.

  1. Pingback: A Tale of Two Worlds | Barataria - The work of Erik Hare

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