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ECONOMICS REPORT - Holiday Shopping

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This is Bob Doughty with the VOA Special English Economics Report.

About two-thirds of the economic activity in the United States is created by people who spend money -- consumers. And much of that activity is created this time of year, as consumers buy gifts for Christmas and other holidays.

Government economists say big department stores make about fourteen percent of their sales in the month of December. That may not seem like a lot. But December sales are almost twice the monthly average for the rest of the year.

The holiday shopping season traditionally starts the day after Thanksgiving. It is called Black Friday. Storekeepers used to record profits in black ink and losses in red ink. So being "in the black" on the Friday after Thanksgiving means a good thing, a return to profit.

But it also means that people face crowded stores, which is the other idea of a "Black Friday," a day they do not like. It used to be the busiest shopping day of the year. In recent years the busiest day has been the Saturday before Christmas.

People who do not like crowded stores have another choice. Americans are buying more on the Internet. The Census Bureau says they bought almost fourteen-thousand-million dollars in goods online in the last three months of last year. Still, that was less than two percent of total retail sales.

The National Retail Federation said it expected holiday sales in the United States to increase by five-point-seven percent over last year. The trade group said it expected sales of about two-hundred-seventeen-thousand-million dollars.

Another group, the Conference Board, measures how consumers feel about the economy. In November it said its Consumer Confidence Index increased by ten points, to eighty. That was good news for sellers. But it is still below the starting level of one-hundred set in nineteen-eighty-five.

Holiday shopping is also important to the stock market. Last week, the Commerce Department said retail sales were higher than expected in November. That report helped the Dow Jones Industrial Average to close above ten-thousand for the first time in eighteen months. Last Friday, though, the University of Michigan released its consumer confidence report. The first report for December showed an unexpected decrease in current conditions.

This VOA Special English Economics Report was written by Mario Ritter. This is Bob Doughty.

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