That's the spirit.

Photographer: Jewel Hamad/AFP/Getty Images

Shoppers' Sagging Holiday Spirit

Mark Whitehouse writes editorials on global economics and finance for Bloomberg View. He covered economics for the Wall Street Journal and served as deputy bureau chief in London. He was previously the founding managing editor of Vedomosti, a Russian-language business daily.
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Could Americans be losing their holiday spending spirit? More than 20 years of retail sales data suggest it's a distinct possibility.

U.S. retailers have come to rely on a shopping frenzy toward the end of the year, as the annual gift-giving season compels people to open their wallets. That holiday bump, though, appears to be shrinking.

Last year, December's share of annual retail sales (excluding gasoline) amounted to 9.9 percent, according to the U.S. Census Bureau. That compares with a high point of 10.6 percent in 1993 -- a difference worth more than $30 billion. Although the holiday boost tends to fluctuate with economic cycles, the trend is down. Here's how that looks:

What's going on? "Black Friday" could be partly responsible, if retailers have pulled some of the holiday action into November with deep discounts and special opening hours. But as Bloomberg View's Justin Fox notes, that particular shopping event is on the wane. And even combining sales for November and December doesn't do much to change the long-term trend.

Another potential explanation is that the kinds of things people buy around the holidays -- Xboxes, iPads and the like -- have become relatively cheap, thanks to the efforts of Chinese manufacturers. This would make the dollar value of December's spending look smaller, even if people were purchasing just as much stuff. That said, prices on imports from China are higher than they were a decade ago, so maybe not.

There's also a darker possibility: Declining incomes may have left a large portion of Americans less willing to splurge. The median U.S. household income has fallen more than 3 percent over the past decade in inflation-adjusted terms. December's share of spending tends to suffer when budgets are tighter, as evidenced by the sharp drop during the 2008 recession.

Finally, perhaps consumers are just getting less susceptible to holiday marketing. If so, this could be a good thing. Economists argue that the annual bout of gift-giving is wasteful, because people tend to get less utility from ill-considered picture frames and electric corkscrews as they would from stuff they bought for themselves. Some have estimated this "deadweight loss" at billions of dollars a year. Then again, such analyses often ignore the satisfaction people derive from the act of giving. So if you decide to be generous this holiday season, don't be ashamed.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Mark Whitehouse at mwhitehouse1@bloomberg.net

To contact the editor responsible for this story:
Stacey Shick at sshick@bloomberg.net