Caitlin Osborne
Mr. Reuter
Economics
16 November 2014
Christmas and the Economy
As we approach the holiday season people are beginning their holiday shopping. SInce the recession consumer spending has continued to slowly pick up and this year spending is expected to increase from last year. The holiday season is typically the greatest season for consumer spending, and this spending boosts the economy. Consumer spending can be attributed to two-thirds of the economy and the holidays are the biggest gift giving season, thus the economy thrives on this time of year. 
From this graph we can see in 2008 during the recession the average american spent $616. This upcoming year it is expected that this will increase to $781. There is a ripple effect in the economy expansion occurs. The more consumers are spending the more the revenue business are bringing in. In turn these business can afford to and will need to hire more workers both full time and seasonal which will lower the unemployment rate. This ripple effect is created when these workers now have a higher annual income and are buying more products and the cycle continues.
The holiday shopping begins the day after thanksgiving, or in someplace on thanksgiving on consumer holiday deemed “Black Friday”. Each year the official start of this day crepes earlier and earlier taking over Thanksgiving a true national holiday.
People obsess over receiving the reward of low prices no matter what the cost is. Black Friday plays an important role in the nation's economy by fueling the business cycle. Businesses themselves have to put out huge amounts of money to advertise their low prices and doorbusters. This raises consumers demand for products which is evident by the long lines that build for days prior to the sale. While this spending may be crucial to the nations economy it reveals a lot about the nature of the United States. There are millions of people who camp outside of stores instead of celebrating the holiday with loved ones and acknowledging all they are thankful for. 
This spending continues into late december with people trying to get in some last minute shopping. Of merchants total profits over forty percent is acquired during the holiday season. These businesses depend on this revenue in order to make ends meet and balance out the slower months at other times of the year. Without this income many companies would not be able to stay in business and this would severely harm the economy. Consumer spending is a reflection on the economy, because if more people are spending money on gifts it can be inferred their income is also increasing. A strong holiday shopping season can be what America needs to continue its economic upturn. However, no single event can be credited as the only factor that boosts the United States economy, but it can be assured holiday spending plays a big role. Without this large national consumer spending the economy could suffer and ultimately enter a contraction phase from a lack of monetary flow.
So, as we enter the holiday season for the economy’s sake continue to purchase goods and services to help businesses profit from sales,and higher more work that will lower unemployment and raise the economic status. However, don’t get caught up in raising the purchasing power of your dollar and miss spending time with your family and a warm turkey dinner in order to get the best deals. Rather spend time with those you are thankful for and do your shopping after thanksgiving is over.
Works Cited
The Hartford Courant. "How Big Is Christmas to Economy?" How Big Is Christmas to Economy? Web. 19 Nov. 2014. <http://www.azcentral.com/business/consumer/articles/2009/12/11/20091211christmaseconomy.html>.
Saad, Lydia. "Americans' Initial Christmas Spending Estimate Is Positive." Americans' Initial Christmas Spending Estimate Is Positive. Web. 19 Nov. 2014. <http://www.gallup.com/poll/178859/americans-initial-christmas-spending-estimate-positive.aspx>.
I really liked this piece and how you related economics to a holiday that everyone loves, Christmas. During Christmas, the demand for products is very high in order to get gifts and presents for loved ones. Producers have to make sure they have enough supply in order to work with the high demand. Businesses do not want a surplus or a shortage to happen, which could hurt their business They want to make the most total revenue.. I like how you brought up Black Friday because I feel like many associate this with Thanksgiving when in fact, it is more related to Christmas. People buy a lot during the Black Friday sales in order to get great deals on Christmas presents. Very good piece and nice job!
ReplyDeleteHey Caitlin! I really enjoyed reading this blog post since it relates to the upcoming holidays very well! Even when people don't have a lot of money during the holidays, what they do have most often goes towards gifts for other people. For this reason, I agree with you that Christmas and the holidays are important to helping our economy, however, after the holidays are over, people usually back off on their spending and resort to saving up until next year causing the economic trends to fall back to or even below normal.
ReplyDeleteChristmas and Black Friday shopping are a big part of the holiday season, unfortunately. People wait outside for hours, very early in the morning, to buy gifts for their loved ones. While it is helpful to those who can’t afford to buy many things at full price, it is also a huge hindrance for many people. Stores have to stay open, or open very early, and employees have to come in to work on days when they should be spending time with family. I am personally against Black Friday shopping, but I don’t judge anyone who chooses to go.
ReplyDeleteWhen Black Friday comes around people get all excited about the great deals that they will find when the get to the stores. Black Friday being the start of the holiday season companies are always looking toward the large income of money. Working at Kohl’s I see all of the deals that we have to offer, and then my number of hours also gets jacked up in order to help with the increase of flow of customers. Overall Black Friday is one of the busiest times of the year when it comes to shopping and deals.
ReplyDeleteIt was great to see how and why Christmas can potentially be a really valuable time of the year for our economy. I believe the holiday's revenue and income will exceed previous year. This would prove that over the past few years economy is in fact getting better. I agree with Kyle, Christmas spending usually gets kicked off with Black Friday. This year I plan on maybe buying presents for the family. This will be my contribution to the Christmas Economy.
ReplyDeleteWith the holidays around the corner, everyone is looking to purchase all their gifts in advance, and of course find the best deals. Black Friday is the perfect opportunity to do so, but I never really realized how much of an effect it had on the economy, and holiday shopping itself did too! You made a great point about how this can help businesses out in the long run, because some of these company’s use Black Friday or holiday shopping to get back on their feet, and make up some lost money, which would also in turn benefit the economy. Another great point you made about shopping during the holiday season is the amount of jobs it offers up, because around this time business can get pretty hectic, so most stores need all the help they can get. This can then lower the unemployment rate, and offer up more jobs to people that need them! Overall, great job Caitlin, this was a really interesting article to read!
ReplyDeleteDo you think that the expansions and contractions in the business cycle could be contributed to ages of kids that are all born around the same time, for example if more kids were born in the year 2000, then 2014, there might not be as great of business for toy stores because 14 year olds are out of the toy stage and more into music, art, sports, and things that can be found a specialized stores for specific products.
ReplyDeleteBlack Friday and basically the whole month of December are the times where businesses are making the most. Certain shops lose business as the colder months approach but the holiday season allows many places to be able to afford to keep their doors open. This is a really important thing because if a business has to close, unemployment will go up and that company will lose a lot of money. The holiday season is great for keeping businesses open, but for consumers, it can be a really stressful time because of all the extra spending that goes into gifts. There has to be a certain balance with the two and since the economy is picking back up, people are spending more meaning businesses are making more allowing the economy to continue to grow.
ReplyDeleteThis is a really great blog especially with the holidays coming up! I think its very interesting that the holidays actually help decrease unemployment due to business need more help around the crazy shopping seasons. I always assumed that holiday buying actually hurt the economy because civilians spent more money than they really should or even have. However it turns out that the holiday seasons help boost the economy by lessening the unemployment rate and providing more revenue for big companies. Overall great job! What an interesting blog!
ReplyDeleteWith Thanksgiving rolling around, I know myself, my family, and my peers are already thinking about christmas gifts and even purchasing them to avoid the mad dash come late December. The graph you included shows that on average we are increasing the amount we spend on Christmas gifts, but people only normally shop during the holiday season. I know my mom has the habit of buying christmas gifts in the spring or summer if she sees something she thinks a family member will like. If this tactic is used by more people, would our Christmas spending on average increase because the gifts are being purchased in a wider span of time? This would also help families budget their spending by not blowing two or three paychecks all on christmas gifts in the November and December months.
ReplyDeleteChristmas time, oh yeah, that's good stuff. Its nice to see that all of us benefit from Christmas, even the economy. its insane how much people spend during that time of year. Although the season is about giving, I bet we get more than we give but, life goes on and we all love one another.
ReplyDeleteI think the power of Christmas to the economy is way too strong. The holidays are supposed to be revolved around family and love, not how much you can save by standing out in front of a store for a day and a half. I understand that the holidays are good for the economy and that stores need this time to increase overall revenue, but the power of Christmas spending is just too strong.
ReplyDeleteCaitlin, I think you chose a relevant topic that effects many of us. A majority of us celebrate a winter holiday, so we will all be doing some spending this holiday season. Many students employment will also be effected by the season. I was hired at Shopko along with many others to work during the holiday season. I never though how much money they spend adveritizing black friday. Its amazing that they profit!
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