Kavmerica.com

If you have watched the local or national news lately no one would blame you if you thought the next “great depression” was right around the corner.  Bad news is good news for the news business and it helps them to drive up their ratings with exaggerated stories about the economy.  While the economy is certainly trending downward it isn’t as bad as they make it sound.

Here’s some good news:  According to E-Commerce tracking site ComScore.com, Online spending was up 15% on Cyber Monday over last year.  15% is huge.  For the weekend of November 29th-30th it was up 19% over last year.  Again that is a huge increase.

Granted some of that increase comes at the cost of instore sales but certainly not all of it.  Consumers are turning to the web to find the best deals and make their dollars go futher.  There is nothing wrong with that and it is surely a positive sign for the economy despite what the mainstream media might have you believe.

CNN Money came out with an article today saying that consumer spending was down 1% in the month of October.   They then went on to say it was “…another woeful sign that the economy will continue to contract.” Woeful?  Let’s not go that far.

To their credit they do at least mention that consumer prices also fell heavily and later in the article they do go on to explain more about this.  You see, when you go out and buy a camera for $99 dollars when last month it cost $100 the amount you spent goes down.  It doesn’t necessarily mean that you are buying less, you’re just buying things cheaper.  That is not necessarily a bad thing.

When you take that into account the fact that the cost of the goods sold went down then consumer spending really only feel .5%.  People are spending one half of one percent less than they did September and somehow CNN Money terms this “Consumer spending fell dramatically in October…”.  Did it really fall dramatically in October?  No, it didn’t.  Was it down?  Yes.  People are starting to become more fiscally responsible.  They are paying down dept and saving money ahead of the holiday season.  Although if you believe CNN this is “… an ominous sign ahead of the holiday shopping season.”  Again, completely untrue.  This could actually be a good sign for the holiday season.  People cutting back on their debt ahead of the busy shopping season and perhaps saving up a little money also.

Personal income actually rose .3% in October and in September it was up .2%.  If they aren’t spending that extra money then they are saving it.  That is a good thing!  Not an “ominous sign”…

The economy did pretty well for itself last month all things consider.  It is in CNN Money’s best interst to make things look worse then they are.  People log on and are fasinated by bad news.  It’s in our nature but that doesn’t mean you have to believe the hype and fear mongering.