As you pack into the mall today with hordes of other Black Friday shoppers, think of it as an act of economic patriotism.
With your shopping bags full of holiday gifts, you'll once again be playing a central role in the U.S. economy.
After retrenching in the early days of the recovery, consumers are reasserting themselves as the key driver of U.S. economic growth. And that's coming at an opportune time, given that other economic propellants such as manufacturing and exports have slowed.
"The consumer is allowing the economy to hang in there," said Brian Wesbury, chief economist at First Trust Advisors in Wheaton, Ill.
Consumer spending accounts for about 70% of economic activity, and the holiday season constitutes as much as 40% of annual retail sales.
Chastened Americans went into a rare defensive crouch following the recession and housing bubble, slashing their spending on all sorts of items.
Businesses picked up some of the slack. But that tide is weakening as business activity slows amid dull global growth and gridlocked budget talks in Washington.
Consumers are filling the void.
Their willingness to spend has been bolstered by improvement in the job and housing markets. Retail activity helped the economy muster a 2% annual growth rate in the third quarter. That's far from exuberant, but it would have been worse otherwise, experts say.
And with corporate executives fixated on the "fiscal cliff" drama over potential tax hikes and spending cuts, a robust holiday shopping season could provide a crucial economic counterbalance.
"Exports are down. Business investment is down," Wesbury said. "But the consumer was strong in the third quarter. The consumer was the reason the economy expanded."
The Conference Board, a business research group, said early this month that Americans' confidence in the economy reached its highest level in nearly five years in October. Many were encouraged by an improving labor market, the group said.
Holiday spending is forecast to rise 4.1% to $586.1 billion, according to the National Retail Federation. That's slightly below the 5.6% gain retailers enjoyed last year.
Experts say a big chunk of people's holiday budgets could be spent over Black Friday, the traditional kickoff to the holiday shopping season. Last year, consumers spent $52.4 billion during the Thanksgiving holiday weekend, up from $45 billion in 2010.
The improvement is being paced by shoppers such as Susan Delgado, 38, a medical biller, who was at the Glendale Galleria this week with her sister.
Her family plans to visit relatives in the Sacramento area next month, their first out-of-town Christmas trip since her husband was laid off from an auto repair shop in 2010.
He found new work six months later but took a pay cut, forcing the couple to cut back on shopping and eating out. Feeling they've regained their financial footing, the couple have nearly doubled their gift budget to almost $1,000.
"You can't go home and not have gifts for the kids," Delgado said.
Andy Spyros, president of Handmade Galleries LA, a gift boutique in Sherman Oaks, expects this holiday shopping season to be the strongest since 2008, with shoppers willing to buy more expensive items.
"This season will be even better than last," Spyros said. "Everyone has their gift lists out again."
For economy's sake, consumers pick a good time to spend
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For economy's sake, consumers pick a good time to spend
