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KAI RYSSDAL: Great to have you here as the fallout from the financial crisis comes full circle. I’d like to take a moment to introduce you to an economic organization you might not have heard of before. Or to the best of your knowledge heard from, either.
Because the times they’re in the headlines are mercifully few and far between. The Business Cycle Dating Committee of the National Bureau of Economic Research are the folks I’m talking about here. They’ve become the de facto arbiters of when recessions begin and end. The committee issued a press relase today that said, in part, economic activity peaked in December of 2007.
In other words, everything’s been downhill from there, and we’ve been in a recession ever since. If right about now you’re wondering where they’ve been, join the club.
KATE BARR: My initial reaction is, so what.
We called around to get some opinions on how much today’s announcement really means. Kate Barr’s the executive director of the Non-Profits Assistance Fund.
BARR: Maybe if the word had been more openly used back in June or July, we could have gotten a jump-start on some of the discussions about how to allocate resources, how to allocate budgets, how to allocate charitable giving.
In its defense, the bureau says it likes to wait until all the data’s in before it makes recessions official.
One thing they don’t look at, though, is the stock market. And probably it’s just as well at that. Worries about manufacturing and retail drove everything lower today. Department store stocks like Macy’s and Saks were down. Apparel chains like Abercrombie? Same direction, even though early reports from the weekend were of higher than expected sales.
Marketplace’s Janet Babin reports from North Carolina Public Radio.
JANET BABIN: Yes, the malls were crowded on Black Friday. The National Retail Federation says consumer spending was up 7.2 percent over last year. And the NRF predicts a modest gain of about 2 percent in holiday sales this year.
But for most retail analysts, that forecast is about as realistic as Santa Claus.
Adrienne Tennant is with investment bank Friedman, Billings, Ramsey. She says the numbers are misleading.
Adrienne Tennant: It makes you think that everything’s fine, and boy we’re off to a great start. But in reality, the margins on the product that they were selling, the gross margins are going to be terrible for the fourth quarter.
That’s because the hottest selling items, things like GPS systems and winter clothes, came with hefty discounts.
And after Black Friday sales jumped off a cliff. Wachovia analyst John D. Morris says he doesn’t think they’ll rebound any time soon.
John D. Morris: We believe that it’s going be a tough time, at least on into the spring season.
The recession gets most of the blame. But also, analysts say there are few must-have items, either in fashion or electronics, to drive us to stores.
Cyber Monday today could bring a Black Friday-like surprise jump in sales. But Morris isn’t counting on that, especially because, like retail stocks, a few retail websites were down today.
Morris: J Crew has had difficulties today. The Gap’s website is down. Not a good day to have that happen.
The companies said the sites were down briefly because of unprecidented traffic. Probably driven by the same tactics that pulled in most Black Friday shoppers — promotions.
I’m Janet Babin for Marketplace.
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