Monday, November 29, 2010

"Black Friday" Sales Volume Has No Bearing on GDP

A great article at Zero Hedge shows that, like most things that everyone "knows", Black Friday is an urban myth when it comes to the economy:
  • Holiday retail sales are only 3.4% of U.S. GDP
  • Holiday retail sales as a percentage of ANNUAL retail sales is between about 20% (not 50% as is often assumed).  If we assume Christmas shipping is two months, this is not too far off from linear (16.7% would be the amount of sales if a retail store had linear monthly sales).
So if there were a huge gain in Christmas sales, it would be statistical noise in total U.S. economic output.  On the plus side, this means that a drop in Christmas sales is noise too, but either way the media makes a too big a deal out of it either way.

1 comment:

Ms. Ryterski said...

I agree, but love to watch the holiday shoving on the local news.