How recession is hitting USA in the holiday's season (2011)?

A Lastest News about Internet Sales and Mail Order in the United States

Posted on: 20 Dec 2011

First let's check what a recession means; A recession is a decrease of less than 10% in a country’s Gross Domestic Product (GDP). The decrease must last for more than one consecutive quarter of a year. The GDP is defined as the sum of private spending and government spending on goods, services, labor and investment.
The terms recession and depression are often confused. It can be said that a recession is in general not as severe as a depression. A recession tends to resolve more quickly.
Not everyone agrees on a specific definition for determining an economic recession, but most can point to several factors, which can cause a recession. Either significant drop in prices, or significant increases in prices can occur. A drop indicates that people may spend less money, thus the GDP is decreased. An increase in price may also reduce both private and public spending and thus decrease the GDP.
In some ways, it is quite natural for countries to experience mild recessions. This is a built-in or endogenous factor of a society. Spending and consumption are going to increase and decrease, as will prices. However, another factor besides these occasional built-in drops in spending is needed to evoke a recession. Usually, something changes quickly and provokes sharp increase or decrease in prices.

Now is really USA still undergoing the recession? And what Recession? U.S. Holiday Online Spending Up 15%
Americans are celebrating the festive season by shopping. According to the latest comScore results (19, Dec, 2011), Americans spent nearly $31 billion in online shopping, a 15 percent increase from a year ago.
The most recent work week (Dec. 12-16) saw four days surpass $1 billion in online spending, led by Monday, December 12 with $1.13 billion and Friday, December 16 (known by the online retail industry as “Free Shipping Day”) with $1.07 billion, according to comScore.
Free Shipping Day, now in its fourth year, is a one-day, online-shopping event when thousands of merchants offer free shipping with delivery by Christmas Eve.
“More than $1 billion in spending on Free Shipping Day put the exclamation point on what will almost certainly be the heaviest week of the online holiday shopping season,” said Gian Fulgoni, chairman of comSore.
While next week may see another strong day or two at the beginning of the week, it’s clear that we have now reached the crescendo for this season and that spending will begin to slow as we get closer to Christmas

While the spending figures may indicate a higher level of consumer confidence as we head into the New Year, a recent Federal Reserve report showed that U.S. consumer credit rose for the second consecutive month in October – a month marked by Thanksgiving shopping and precedes Christmas spending – a sign that Americans are taking on more debt to pay for their purchases.
 


Posted: 20 December 2011

See more from Internet Sales and Mail Order in the United States

Expert Views    
US Hispanic Market Website Translation & eCommerce   By Globalization Partners International
Preparing Your Business for Global ECom   By U.S. Commercial Service
What is a Non-Resident Importer or NRI (Canada)   By Pacific Customs Brokers Ltd.
Licensing - a good International strategy?   By Atlantric
Hot Tips    
What is a Non-Resident Importer or NRI (Canada)   By Pacific Customs Brokers Ltd.