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Black Friday Looking Bleak As Job Losses Affect Spending

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By SHANNON BEHNKEN

sbehnken@tampatrib.com

Published: November 27, 2008

TAMPA - Holiday deals may be hot, but retailers can still expect the worst Black Friday since the early 1970s, according to a University of Central Florida economist.

The major shopping day will be a disappointing one, as overall consumer spending continues its downward slide this quarter, said economist Sean Snaith.

"Consumers have seen trillions of dollars of housing and stock market wealth evaporate," Snaith said. "And they're faced with a steady stream of layoff announcements amid a still-rising unemployment rate."

Consumers nationwide will likely spend less on holiday gifts this year, but especially in states such as Florida, which is hard-hit by the economic downturn, Snaith said. He points to the Sunshine State's jobless rate, which is higher than the national average of 6.5 percent.

The state's unemployment rate was at 7 percent in October, according to Florida's Agency for Workforce Development. That's a 0.4 percentage point spike from September's rate. Statewide, there are 655,000 people who are unemployed.

Many more fear they'll be laid off this year so their holiday gift lists will likely be conservative, Snaith said. The rate of decline in consumer spending, he said, hasn't been this low since 1974.

"Understandably, they are battening down their personal financial hatches by cutting back on spending to try and ride out this economic storm," he said.
Snaith said he expects the economy to deteriorate further before it gets better toward the end of 2010.

"Unfortunately, we haven't seen the worst of it."

Reporter Shannon Behnken can be reached at (813) 259-7804.

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