THIS MAY BE a very interesting Christmas season.
Even with the national unemployment rate above 10 percent, retailers appear cautiously optimistic about holiday sales this year.
At least that's what they're saying out loud. What they are thinking may be another matter entirely.
The holiday shopping season--which starts today--may well be the barometer for what is to come in 2010. If sales are up, maybe the worst is indeed behind us. If shoppers don't spend, then maybe we're still in deep trouble.
"Don't spend" may not be an accurate phrase. "Can't spend" may be more appropriate.
How do you spend if you don't have money? And if you don't have a job and a regular paycheck, you don't have money.
It used to be that you just pulled out your credit cards, but that day is all but past. Many out-of-work Americans have been living on their credit cards, and they are maxed out. Unlike five years ago, no new ones are coming in the mail.
From a personal perspective, I can guarantee you that this Christmas my family won't be spending anywhere near as much as we have in years past.
In fact, this Christmas will be even worse for us than last year. Two of my three children are out of work, and those of us who are employed didn't get raises last year.
I watched some of those so-called "experts" shake their heads last month when consumer sentiment numbers plummeted. They couldn't understand why.
Well, it was the end of October, Christmas was coming, and millions of people were out of work. To make matters worse, many people were getting their personal property and real-estate tax bills, which are due in December. You don't think those two factors weigh heavy on an unemployed person's mind?
The rising unemployment rate is also putting a strain on many who are still working. Parents are helping their out-of-work children make rent and car payments to keep them afloat until they find jobs.
And kids who have moved back home are creating higher energy and food bills that drive up household expenses. Sometimes parents even have to dig into their pockets to help their adult children get temporary health insurance policies.
It all adds up. Actually, it all takes away--from what is available to spend for Christmas.
Consumer sentiment? Last year at this time my daughter had a good job and was looking forward to buying Christmas presents. This year, she is unemployed.
Last November my son, who was about to finish graduate school, had high hopes that he would have a good job by now. He, like a number of his friends and fellow graduates, can find nothing. And since they have never had full-time jobs, they are not even included in unemployment statistics.
I'm sorry, but I do not share retailers' optimism for the Christmas season. Perhaps I am wrong; perhaps consumers with no jobs and no money can spend big bucks on presents. But I don't understand how.
Walmart will almost certainly be the big winner again this Christmas season. No matter how much some may despise America's largest retailer, there is little doubt that Walmart can sell cheaper than anyone else. And in a penny-pinching economy, cheap is where it is at.
Like last year, this Christmas season will either make or break any number of retailers, especially the smaller ones. January will probably see many doors close for good. And when stores close, more jobs go.
In addition, many temporary employees will again be laid off after Christmas. I will be very surprised if the unemployment rate does not hit 11 percent by February.
I hate to predict doom and gloom, but I cannot see a good Christmas season--even compared with last year. Unemployed people don't have money, and they can't get credit. That's a fact. And it's hard to spend big for Christmas with no money and no credit.
Retailers will also not be helped when a parent's Christmas gift to his child is a month's rent or a car payment. Nor will stores benefit from higher tax bills that come due the first of December.
Even further down the consumer-confidence pipeline, many out-of-work people are starting to realize that since they are unemployed, they won't be getting income tax refund checks in February to help pay for Christmas spending.
I hope I'm wrong, but this may be the hardest-candy Christmas that Americans have experienced since World War II.
Donnie Johnston:
Email: djohnston@freelancestar.com