Where The Heck Was The “Festive Spirit?"

Wolf Richter's picture

Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter

Shocked and appalled—that was the reaction to the shopping-season debacle unfolding in the US. It was triggered by MasterCard’s SpendingPulse report that poured ice-cold water on expectations of a 3% sales growth. But now there’s a new term to describe “consumer spending,” “consumer debt,” and ultimately “trade deficits” when they occur as a function of such uplifting concepts as “holiday season” or “Christmas” whose magic is boiled down to just one issue: how much did everyone spend?

Who came up with it? Retailer par excellence, Michel-Edouard Leclerc, CEO of E.Leclerc, France’s largest retailer with a market share of 18%. He faced a challenging environment as unemployment soared above 10% and as the already anemic private sector plunged into a crisis. Yet “Christmas was saved,” he said today, by “the festive spirit.”

The “rush during the last three days” made up for weakness during the prior weeks and brought E.Leclerc’s sales up to expectation. He outlined the phenomenon of the “festive spirit”—that drive to separate yourself from your hard-earned money, and if you don’t have any, from borrowed money—in more scientific detail: “The deeper we go into the crisis,” he said, “the more there are moments like these, when people tell themselves, ‘Sh-t, let yourself go.’”

But in the US, that festive spirit was apparently lacking. During the eight weeks before Christmas, according to MasterCard’s SpendingPulse report, consumers only spent 0.7% more than during the same period last year, the worst showing since 2008. Despite some help from the calendar: there was one more weekend between Thanksgiving and Christmas this year. When inflation is taken into account—CPI rose 1.8% in November over prior year—sales actually dropped.

So, it’s an estimate. Data gleaned from MasterCard payments were extrapolated to all payment forms—including a wad of wrinkled twenties I pulled out of my pocket to pay for dinner—and to all consumer products, from flowers to pickup trucks.

“It’s a lost season,” said SpendingPulse VP Michael McNamara. The festive spirit was even lacking online, which disappointed with an 8.4% increase, rather than the double-digit increases we’ve become accustomed to. Many Retailers tried to salvage the season at the last minute through heavy discounting, with mixed results. More discounting is expected to clear out the inventory, and to wrest that money by hook or crook away from the harried and strung-out consumer.

Blamed was Sandy: in the Mid-Atlantic region, sales dropped 3.9%. And the Fiscal Cliff—a veiled threat at Congress and the White House that reducing budget deficits in any meaningful way now, rather than kicking the can a decade down the road, will wreak havoc on the economy [The Majestic US Debt, Visualized, Animated, With Rousing Music].

To get a handle on the Fiscal Cliff’s impact on the festive spirit, I’ve been doing my own mini survey. Of course, there were those respondents who watched the theatrics and fretted about every twist and turn. But quite a few people reacted similarly to the guy who cuts my hair—a small-business owner, hard-working, in his forties. He confused the Fiscal Cliff with the “Mayan” apocalypse and wasn’t worried about either one of them. He did lament that he was spending too much money on clothes and that he tried to sell some of his $400-jeans but could only get $20 to $40 a pair, if he was lucky. And he groused about the so-so month he was having. Those were his worries. Not the Fiscal Cliff.

But there are real issues that impact the festive spirit. For example, the 46.2 million people who are on food stamps, up from 30 million in 2008. Or the millions of people who are either unemployed or have dropped out of the work force and no longer count as unemployed. The Employment-Population ratio, which has been wobbling near its multi-decade low, confirms that barely enough jobs have been created since 2009 to keep up with the growth of the working-age population [The Consumer (And The Economy) Is Alive and Dead].

Nevertheless, we cling desperately to glimmers of hope: among them, weekly chain store sales. After two utterly morose weeks in early December (-0.7% and -3.1%), sales rose 0.7% for the week through December 22 and 4.3% during the prior week. The festive spirit at the last minute. But even the festive spirit may have trouble overcoming the constraints of reality.

And that wad of twenties I pulled out of my pocket? That went for steaks. I love steaks. Rare. But now, an investigation into the potentially deadly industry practice of mechanical tenderization of beef has turned into a nightmare for steak lovers. The risks have been hushed up since at least 2003, and the industry resists even the most basic labeling requirement that would save lives. Read.... The Beef Industry’s Deadly Secret: “Blading” and “Needling” 

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rsnoble's picture

I'm not changing my steak eating habits.  I live in the stix and billybob at the butcher shop can be viewed cutting the loins, there are no needle machines.  I'll continue this until agenda21 is in full implementation.  Of course by then it will be human flesh.

Fuck the US gov't. Those motherfuckers have to go!

I am Jobe's picture

I have the best Christmas Year after Year. Go sit in a park , feed the birds and enjoy a modest meal. No crap for me. I look around the frenzy and wonder if these people are for real. It's over,

I am Jobe's picture

Dammit Amerikan Sheeples, buy more fucking crap no matter what. Now go do your art and fill your fucking life's with crap and more crap. Buy several IPADS .

CompassionateFascist's picture

90% of the "spending" is plastic debt creation. Up, down, it no longer matters. Invest in lead, and do it with plastic.   

Never One Roach's picture

Police in riot gear needed to break up parental brawl at California youth football game



ebworthen's picture

The word around the Holiday gatherings is lots of people struggling.

Former firmly entrenched middle and upper-middle class families with one or both out of work and living on unemployment or chasing MLM and pyramid schemes.

Shit sucks, and so does the economy and our government and oligarch overlords.

The "fiscal cliff" talk is all a bunch of nonsense; they will consipre to tax us more and cut already taxed entitlements and extend and pretend with more debt and largesse.  The debt is already much too large to ever be paid or fixed, much less by our do-nothing pancake political class.

cornflakesdisease's picture

It must have been a crappy Christmas.  The dumpsters around my town home were all only half full.  In Christmases past, they were over flowing with boxes etc.

Mark Noonan's picture

Shall we take bets on who will be the last person to think that consumer spending means economic health?  And who will be the first "genius" in government and/or finance who announces that production and savings is what makes for economic health?

GCT's picture

Mark I thought ZH and some of it great commenter's stated that a long time ago.  Bernanke and the government do not want you saving anymore so they started ZIRP to get investors to play in the markets.  Skimming off peoples money.

I prefer tangible assets myself.  The best Christmas present I received was a clay sculpture my son made and boxed up and gave me 25 years ago.  It sits in my legal bookcase.  Ugly sure but worth more then anything money can buy!

q99x2's picture

The way I see it is that the pundits say 70% of the economy is based on consumer spending but 65% of the people really have so little money that their portion of the 70% is minimal. So to me it looks like the depression is moving up the ladder this Holiday season.

monad's picture

Stay away from professional money lenders. I've been investing in my temporarial upside down friends. They have my back. They don't need crapola™ to know where we stand.

mademesmile's picture

We had a great Christmas. Got a nice pressure cooker for canning and 5 ounces of silver from my husband. He got a scope and a heavy duty hoodie. Kids got some great toys. Best of all, we save $50 a month so Christmas spending is paid for, 0 debt for 0 crap. I have done it the hard way before (spending on a credit card ) and will NEVER go back.

Dan The Man's picture

I smoked my festive spirit.  Much sounder consumer "investment" if you ask me.

TheFourthStooge-ing's picture


I smoked my festive spirit.  Much sounder consumer "investment" if you ask me.

MmmmmHmmmmm ........ that's good catnip! [koff]

WTFUD's picture

Bruv that steak/ steak tartare will be a fond memory soon replaced by raw human flesh; and in the grand scheme of things you will be grateful for it; much tastier than excrement balls or pancakes for most of the folks.

A lot of bright people, much brighter than myself have made it clear you rear your own food on your own land. otherwise go collective with family, neighbours, friends ( chip in ) and get a polytunnel.

If the fucked up government of Kenya(elsewhere) will displace ( albeit expropriated and paid for in full blood sacrafice hard fiat) whole villages/ tribes 3 times older than the USA to grow food to export to the puppet regime in Qatar ( who can't drink crude or yet get a thumbs up from Assad for that pipeline through syria), whilst 90% of the country live in poverty then does Any mustard hold mustar?Suppose though 3% of Kenyans in the trade off get cheap gasoil & weapons to ponce around deciding where& where is fertile enough for the next unwanted mass exodus in Independent ( british) Kenya.

Merry Xmas and Happy New Year

Zer0head's picture

brings to mind this Hidden Epidemic: Tapeworms Living Inside People's Brains


Yes_Questions's picture



Dammit!  Each way we turn..


economics9698's picture

Life is good if you are a government worker or retired government worker.  Trips to Alaska, shopping, Hawaii, it pays to be a government worker and retire at the age of 45 or so.  Money to burn, a lifetime pension. 



Paula Bono Dockery 5 hours ago near Lakeland, FLhttp://static.ak.fbcdn.net/rsrc.php/v2/ys/x/t0WxoMd7EqC.png); background-size: auto; display: inline-block; height: 12px; width: 12px; bottom: -1px; margin-bottom: -5px; position: relative; vertical-align: top; background-position: -628px -39px; background-repeat: no-repeat no-repeat;">  Anyone else go bargain hunting today? Like · 


Zer0head's picture

Dickheads of the year go to Bloomberg's Mike McKee and SocGens Flickenger


They blame Sandyhook for the poor sales  - yes they blame the shootings in Newtown for poor retail sales explaining that those who have money decided to give it to charity instead of shopping at Tiffany's because they felt so bad about the Sandyhook slaughter




And later in the show McKee proves that he is a bigger dickhead than Liesman as he repeats not once but twice that the Fed is printing $45b per month - Tony Crescenzi of Pimco politely corrects McKee and then dismisses him



goldfish1's picture

Shocked and appalled—that was the reaction to the shopping-season debacle unfolding in the US. It was triggered by MasterCard’s SpendingPulse report that poured ice-cold water on expectations of a 3% sales growth.

I'm getting to hate "X-Mas". Next year it's the winter solstice for me with a nice soup and bread at the sight of the first star and candles and fire and a prayer for the earth and my loved ones.

Thanks for the reminder.

IamtheREALmario's picture

I pray for the people of the earth every day and also give thanks for the wonderful place this is even with those who seemingly have been led astray running it.

Creepy Lurker's picture

Nice. Screw the commercialism. The 21st is the real holiday; the return of the light.

I baked cookies for my friends and took them around on Friday. Then we ate a meal together. Better than any cheap Chinese crap.

cbxer55's picture

I bought nothing for anybody, got nothing in return, and stayed home all four days I was off. This year I am simply not in the mood for this shit. I suspect,  next year will be the same or worse. The increased taxed coming our way, if I even still have a job, are going to hurt pretty bad. Once I get my truck paid off, sometime mid year, things should be okay. BUt I am still going to be Scrooge next Christmas, guaranteed.

Freddie's picture

O's Amerika is like living in East Germany or worse.  The Stasi has the new and improved NDAA that just got passed.   Sick.