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The general consensus is the American economy – which was technically in a recession during the first half of 2022 – is headed for an even deeper downturn in 2023. The main reason? Surging interest rates imposed by the secretive Federal Reserve bank in an effort to tame runaway inflation.
These interest rate hikes are putting the brakes on economic growth … making it harder for individuals and businesses to borrow money. Making this already bitter pill even harder to swallow is the fact it was unnecessary government “stimulus” spending (here and here) which created the inflationary pressures in the first place.
Talk about getting screwed coming and going, right?
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Signs of growing strain on the beleaguered American consumer were evident in early holiday shopping data released this week by Mastercard. According to the credit card company’s spending pulse data, U.S. retail sales (excluding automobile sales) climbed by 7.6 percent this holiday shopping season compared to last year.
That sounds like a good number, but when you consider inflation clocked in at 7.1 percent on a year-over-year basis in November – and the Mastercard data doesn’t account for inflation – it means hardly any progress was made.
“Factoring in higher prices … the data suggest a more muted holiday shopping season,” Sabrina Escobar noted for Barron’s.
Also, this year’s increase underperformed last year’s 8.5 percent bump, an uptick which wasn’t washed away almost entirely by a devalued currency.
Looking inside the Mastercard report, online shopping climbed by 10.6 percent from last year during the holiday shopping period – which runs from November 1 through December 24. In-store shopping rose by 6.8 percent – which actually lagged behind the inflationary benchmark.
Here is a look inside the numbers …
(Click to View)
We should get a fuller look at how the holiday shopping season ended next month when the U.S. Census Bureau releases its advance monthly sales data for the month of December. Those numbers are expected to be released on January 18, 2023.
November’s advance monthly sales showed an unexpected 0.6 percent dip from the previous month – and the annual 6.5 percent increase came in below the inflationary benchmark.
How to turn things around? It starts by electing policymakers at the federal, state and local level who are committed to growing the economy, not more government – who believe in incentivizing employment, not dependency.
Unfortunately, those are not the leaders currently in place in Washington, D.C. – or in Columbia, S.C. for that matter.
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ABOUT THE AUTHOR …
(Via: FITSNews)
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and seven children.
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