(What’s Left of) Our Economy: About that American Shopping Revolution….

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consumer spending, consumers, consumption, goods, Great Recession, holiday shopping, hotels, recreation, restaurants, services, shopping, spending, {What's Left of) Our Economy

The final figures for the last holiday shopping season are in, and they seem to confirm a trend that students of the retail industry – and lots of retailers themselves – claim is becoming dominant: Shoppers are spending more and more of their dollars on services – especially those that offer “experiences” – and fewer and fewer on goods.

This Washington Post article handily sums up the evidence – both the data and the views of various retail executives and consultants. Even more telling, it describes the very substantial store closings recently announced by like companies like Macys. Nonetheless, if you look at the U.S. government figures on how Americans spend their money (as opposed to what’s sold by stores), the only significant increase visible in that “experience” spending has come over the last year. And so far, there’s no sign that it’s come at the expense of goods purchases.

The spending figures are found on the Commerce Department’s Bureau of Economic Analysis website, and they’re not only broader than the retail sales numbers (which are kept at the separate Census.gov). They also come adjusted for inflation. They show that, through the third quarter of this year, spending on restaurants and hotels and other forms of accommodation rose by more in real terms (4.45 percent) than overall after-inflation personal consumption (3.15 percent). But spending on “recreation” was up only 1.49 percent. And purchases of goods increased a relatively healthy 3.91 percent – also considerably faster than purchases as a whole.

But maybe the shopping priorities shift only becomes apparent if you look at the entire economic recovery? Not according to these statistics. Since the last recession ended in mid-2009, restaurant and hotel spending has risen by 17.45 percent in real terms – faster than the advance in total personal consumption (14.85 percent). But recreation services spending has increased by only 12.76 percent. And real consumption of goods beat them both – up 23.21 percent.

Nor is there much reason to think that the Great Recession ushered in big change in American consuming away from goods. If anything, quite the opposite. Since it began, in December, 2007, all real personal spending has risen by 11.71 percent, with goods spending leading the way with an increase of 14.94 percent. Restaurant and hotel spending is higher by just 10.54 percent – barely better than the increase in after-inflation overall services spending of 10.17 percent. The figures for recreation services? A mere 7.28 percent improvement.

And revealingly, the growth disparity between goods and the other spending categories is wider still since the start of the century. Between 2000 and 2014 (the last full-year data available), adjusting for inflation, restaurant and hotel spending increased by 25.51 percent, recreation spending by 27.67 percent, while goods spending jumped by 44.16 percent. The goods rise was also much faster than that for services overall (27.60 percent).

These numbers, in fact, challenge not only the claims about changing shopping tastes in the United States. They challenge claims about the entire economy being dominated by services. It turns out that that’s mainly true on the production side – where measured by real value-added (a different but comparable gauge) inflation-adjusted services output was up 31.87 percent between 2000 and 2014. That’s nearly three times faster than the real goods production increase of 10.98 percent. That is, Americans still buy huge and smartly growing quantities of goods. But more and more of them come from abroad.

(What’s Left of) Our Economy: Has the Fed Gotten Savings Incentives Completely Wrong?

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Baby Boomers, banks, consumers, debt, deposit rates, federal funds rate, Federal Reserve, finance, Financial Crisis, housing, incomes, interest rates, recession, retirees, savings, savings rate, seniors, spending, The Economist, zero interest rate policy, {What's Left of) Our Economy

As many of you may know, the Federal Reserve yesterday raised the interest rate it directly controls above an effective zero level for the first time in seven years. So it’s especially interesting and important that a post from The Economist just before the rate hike made a strong case that one of the main rationales for keeping interest rates so low has backfired big-time on ordinary Americans and on the consumer spending still driving most U.S. economic activity.

Just after the height of the financial crisis, the Fed lowered its so-called funds rate to zero (actually, it was a range of zero to 0.25 percent) in part to make sure that the carnage that was spreading from housing to Wall Street and increasingly to the rest of the economy wouldn’t scare households into closing their wallets,and therefore choke off even more growth. The federal funds rate doesn’t directly set consumer borrowing rates – it’s the rate offered by the central bank to the country’s biggest banks. But the Fed was hoping that super-easy money would have twin stimulative effects.

First, when these banks’ borrowing costs fall, they can offer cheaper loans to both consumer and business borrowers and stay just as profitable. And the more affordable credit becomes, the more borrowers were expected to use. Second, the Fed was hoping that super-low rates would penalize saving. A rock-bottom federal funds rate would drive way down the returns on such popular consumer savings vehicles as money market funds and certificates of deposit and savings bonds, and convince Americans that they were better off spending existing savings and incoming income rather than receive literally no reward for thriftiness.

The Economist, though, has argued that the Fed’s penalize-savings strategy was misbegotten. And it looks like it should have been obvious even then. As the magazine points out, the biggest reason Americans save is to ensure a comfortable retirement. For any retirees or those nearing that age who already have substantial savings, even very low-yielding assets can together spin off enough income to ensure the golden years living standards they want.

But then ask yourselves how many Americans were in this situation when the financial crisis and recession struck. Inflation-adjusted incomes for the typical household had been stagnating. Thrift became a forgotten virtue; in part because of those stagnant incomes and in part because perpetually rising home values were hyped as an acceptable substitute, the nation’s personal savings rate hit historic lows and in fact briefly fell below zero. Then, of course, home values began cratering and the stock market went into free fall. So safe but low-yielding assets looked like the only viable savings game in town.

Unfortunately, the lower the return, the bigger the pot needed to guarantee that comfortable retirement. As a result, more and more of the aging American population has felt greater and greater pressure to salt away any new income not needed to cover ongoing living expenses.

Nor do you need to take The Economist‘s analysis on faith. For nothing has been clearer during this weak economic recovery than the continued consumer caution so responsible for holding it back. Many analysts attribute this behavior to a simple – possibly excessive – “once burned-twice shy” fear. But The Economist‘s treatment at least points to another important factor: For Americans with stagnant incomes and meager liquid savings – along with continuing debt – returning to pre-crisis and recession-level spending simply hasn’t been an option. In fact, evidence is accumulating that growing numbers of seniors, including recently retired baby boomers, are feeling these pressures, too – especially on the debt front.

Not that the Fed’s quarter-point rate hike will change matters much. In fact, signs haven’t even appeared yet that it’s a step in the right direction, as those banks that have raised the rates they’re charging for borrowers haven’t raised those that they’re paying to depositors. Until rates rise high enough to reward savings significantly again, most Americans will have ample reason to view recent Fed policies as lose-lose propositions.

(What’s Left of) Our Economy: Why All Growth isn’t Created Equal

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bubbles, debt, Financial Crisis, GDP, Great Recession, gross domestic product, growth, housing, inflation-adjusted growth, Obama, personal consumption, spending, {What's Left of) Our Economy

If you really want to know what’s going on with the U.S. economy, and especially what its main problem continues to be, forget about the headline number on growth in the third quarter (1.50 percent, annualized, after inflation) that the government reported this last week – and not just because it’s going to be revised several times going forward. Instead, look at the quality of that growth and, by extension, what the economy mainly consists of these days. You’ll see that it’s become nearly as bubble-ized as during the previous decade of phony growth that led to the financial crisis and its punishing – and ongoing – aftermath.

Following the worst economic debacle since the Great Depression of the 1930s, you’d think that America’s political, business, finance, and academic leaders would recognize that, for all the virtues of and indeed the necessity of economic growth, all growth is by no means created equal – or at least not all economic activity defined by the federal government and the economics profession’s mainstream as growth.  

For example, when a natural disaster ravages a certain location, and the damage is repaired, the repair work – whether mainly done by government or the private sector – counts as growth. When the government increases its spending for any reason, that counts as growth (including on weapons that never get used). When households make purchases with borrowed money, that counts as growth. When businesses make much more of a product than anyone can possibly use, that counts as growth.

The government’s methods for counting growth do provide some correctives. Notably, any purchases of goods or services that come from abroad are recorded as subtractions from the overall size of the economy (the gross domestic product, or GDP), and from growth (when they increase on net). And if business over-production goes to stocking inventory, and those inventories are eventually drawn down because not enough customers wanted the stuff, this so-called liquidation is considered a subtraction from growth and GDP as well.

But lots of debt-fueled growth quite comfortingly supports the notion that the economy is expanding normally, because as we’re discovering during this weak economic recovery, Washington’s ability to create credit without incurring disaster – at least so far – is much greater than previously thought. And some economists view it as even greater than has been seen, and even practically limitless.

If, like entirely too many of America’s political and other leaders, you’ve already forgotten the dangers of over-reliance on debt-fueled (i.e., low-quality) growth, then the below data won’t trouble you in the slightest. If you are worried about the quality of growth, you’ll find plenty of reasons to think that the economy is steadily falling into the same trap that victimized it between 2001 and 2007, and eventually produced the near-meltdown that began right afterwards.

As I’ve repeatedly written, the low-quality growth of the bubble decade was dominated by a surge in household consumption and home-building. When the previous decade’s expansion began, in the fourth quarter of 2001, these two activities together represented 71.97 percent of gross domestic product, adjusted for inflation. The inflation of the housing bubble in particular drove that number to an all-time high of 73.27 percent in the second quarter of 2005. And even though housing began collapsing soon after, it still stood at 71.40 percent when that recovery ended, in the fourth quarter of 2007.

The growth figures that came out last Thursday revealed that this toxic combination stood at 71.98 percent of the economy after in inflation. That’s well above the level at the last recession’s start and, just as important, even farther above the level when that recession ended in mid-2009, when it fell to 70.94 percent. It’s also the highest such level of the current expansion. In other words, growth during this current recovery – which has pleased almost no one aside from Democratic politicians – has not only been subpar historically. It’s been driven by the same unreliable fuels responsible for the fake growth of the bubble decade.

The main change between that growth and today’s is that housing activity is still relatively subdued, and household spending dominates. In fact, according to the just-released third quarter numbers, it no represents 68.74 percent of inflation-adjusted GDP. That’s a new record. The former high, 68.66 percent, was set in the first quarter of 2011. But housing then came to only 2.52 percent of real GDP. Now it’s 3.24 percent.

President Obama, for one, has recognized the perils of bubble-ized growth, and the urgency of scrapping the country’s “house of cards” business model and creating “an economy built to last.” The newest GDP figures are a sobering reminder of how quickly and thoroughly this imperative has been forgotten.

(What’s Left of) Our Economy: RealClear Fakeonomics on Trade

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2016 elections, Bernie Sanders, borrowing, China, debt, Donald J. Boudreaux, Donald Trump, Financial Crisis, Great Recession, Japan, RealClearMarkets.com, spending, Trade, Trade Deficits, William Odom, {What's Left of) Our Economy

George Mason University’s Donald J. Boudreaux is one of many economists worth following simply for his skill at articulating the profession’s completely brain-dead and actually harmful conventional wisdom about trade – and I’m pleased to report that he’s just done it again. Almost as revealing, his latest missive on why trade expansion of any type is always good, and all limits imposed on this expansion always bad, was highlighted this morning on the influential RealClearMarkets.com website. That is, it was deemed to contain unusually penetrating and newsworthy insights.

Timely maybe, since two major presidential candidates this year – Republican Donald Trump and Democrat Bernie Sanders – have been major trade policy critics, too. But the only news in Boudreaux’s latest post is how clueless so much of the nation’s economic policy establishment remains about the consequences of trade absolutism despite a financial crisis that taught exactly the opposite lesson with a vengeance.

According to Boudreaux, there’s not only nothing wrong with running even chronic, massive trade deficits. They bring crucial and widely unappreciated benefits. In his words, “If the goods and services available to the American people are greater as a result of international trade, then Americans are wealthier, not poorer, regardless of whether there is a ‘deficit’ or a ‘surplus’ in the international balance of trade.”

More specifically, “If the Chinese become zealous devotees of a religion whose doctrine requires that they serve Americans by shipping to Americans goods and services free of charge, then Americans are made better off….If the Chinese monetary authority buys US dollars with newly created yuan in order to (of necessity temporarily) make Chinese exports artificially inexpensive for Americans to buy, then Americans are made better off (although Chinese citizens, other than those involved in the export trade, are made unjustifiably worse off).”

I’ve been hearing these arguments for more than 20 years, and in fact recall vividly a session in Washington, D.C. in which the late William Odom, head of the National Security Agency under President Ronald Reagan, upbraided critics of U.S.-Japan trade policy who were ungrateful to Tokyo for supplying Americans with all those great products in exchange for IOUs (i.e., the Treasury debt needed to buy those imports – since the U.S. trade deficit meant that Americans weren’t earning enough to pay for them with their incomes).

Another way of expressing Odom’s idea is that it’s more important for Americans to be able to access stuff in financially irresponsible ways than to be able to buy them with their wages, salaries, and other earnings – and never mind the debt buildup required.

Yet Odom and others like him – and they were legion – at least had the excuse of speaking and writing before a terrifying financial crisis that nearly melted down the entire world economy, and whose after-effects are still being felt in the form of an historically weak recovery following an excruciating recession. Yet despite this near-catastrophe and its painful aftermath, Boudreaux is still preaching that consuming and spending – and the still-dangerous debt accumulation needed to support this activity – matter more than ensuring the wherewithal vital for consuming and spending responsibly. I’m still trying to figure out his excuse, and that of RealClearMarkets.com.

(What’s Left of) Our Economy: Gallup Survey Shows No Public Consensus on Boosting Recovery

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2016 elections, balanced budget, budget deficits, economy, education, executive pay, Immigration, infrastructure, minimum wage, recovery, regulation, Social Security, spending, taxes, Trade, training, {What's Left of) Our Economy

I’m a strong believer the American people’s ability to understand policy clearly enough to govern themselves wisely, and an equally strong believer in viewing opinion polls skeptically. But some new Gallup findings on economic issues are so contradictory and confusing that it’s enough to make the most dedicated populist think twice.

You can see the full results here. (And Gallup says it will expand upon this exercise throughout the rest of this presidential cycle.) But here are some that are especially head-scratching:

> Of the 47 policy ideas presented to voters, only nine were judged likely to be “very effective” at improving the economy by half or more of respondents, and of these, four were so rated by 50 percent even. That’s no doubt in part a function of the large number of proposals (which would tend to fragment preferences – as we seem to be seeing for the Republican presidential field). But the diversity of popular responses strongly points to less comforting explanations.

> The only two proposals cracking the 60 percent “very effective” mark were “Ensuring that women receive equal pay for equal work” and “Improving job training for veterans.” Trailing close behind, at 58 percent, was “Giving small businesses easier access to loans to start or expand their businesses.” Nothing else exceeded 55 percent.

> The 50 percent neighborhood is where the fun really starts. Principally, budget deficit hawks will be heartened by roughly this level of enthusiasm for “Reducing federal government spending”; “Requiring a balanced budget”; and, arguably, “Reforming Social Security to ensure it remains solvent.”

> But spending doves will be just as pleased to see that roughly half of respondents saw great potential in “Spending more government money to improve U.S. schools and education”; “Providing free community college education for all Americans who want it”; and “Providing new federal government programs designed to increase manufacturing jobs.” Perhaps tipping the balance in the doves’ favor is the near-majority backing for increased public sector funding for pre-school education, more government loans for small businesses, and tax incentives to encourage business to train workers. These results also seem to signal fairly high public confidence that more educational opportunity is needed for spurring and spreading prosperity.  

> Some of the measures most prominently touted by politicians in both major parties haven’t lit raging fires under American voters, according to Gallup. “Increasing the minimum wage” was described as a “very effective” way to strengthen the economy by a solid but not spectacular 44 percent of respondents. Generating even less excitement were “Reducing income tax rates for all Americans” and “Reducing government regulations on small businesses,” which both came in at the 40 percent mark.

> However much Americans complain about the quality and quantity of their infrastructure, only 39 percent regard “Developing federal, state, and private partnerships to invest” in such systems as a great way to spur better economic performance. And for all the animus against Wall Street and the rest of Big Business, only 38 percent registered great confidence in “Setting a limit or ceiling on corporate executives’ salaries.”

> Immigration and trade issues were gauged by Gallup, too, but here the results look less reliable, thanks to some dubious wording choices. One possible reason: The polling firm received input on the entire survey from, among others, “economists, academics and economic and political observers” – groups where orthodox, establishmentarian views (of both liberal and conservative varieties) reign supreme.

> The immigration questions seemed unexceptional, and showed the public saw relatively little economic payoff from encouraging more immigration either by “high-skill” foreign nationals who graduate from American universities, by skilled workers generally, or by their low-skill counterparts. But respondents were never asked about the potential of limiting or reducing legal immigration flows, much less about cutting off illegal immigrants’ access to jobs and public benefits.

> Much more problematic were the trade questions, which gave respondents two choices: “Negotiating trade and economic agreements designed to enhance trade with other nations” and “Increasing tariffs and taxes in order to make it more expensive to import goods into the U.S. from overseas.” The former was seen as a very promising growth engine by 29 percent of respondents, the latter by 24 percent. But if you think about it, why should anyone intrinsically doubt the benefits of “enhancing trade,” especially if no drawbacks are listed? Conversely, including the word “tax” in the question suggesting trade barriers was bound to reduce this option’s popularity. What kinds of results would Gallup have gotten, for example, if its question mentioned something on the order of “Increasing tariffs to replace goods in our stores made by foreign workers with goods made by American workers”?

I’ll keep monitoring Gallup’s efforts on this score – and hope that the company does a better job framing the debate on the globalization-related hot button issues that seem to be generating an unusual number of political headlines.

By the way, it’s important to recognize that this survey doesn’t measure public backing for or opposition to these economic ideas. Instead, it measures how well the public believes these measures will or won’t improve the economy.  These questions are similar, but not identical.      

 

(What’s Left of) Our Economy: Why Increasingly Disposable Workers Become Increasingly Wary Consumers

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benefits, bubbles, consumers, debt, Employment, Federal Reserve, growth, incomes, Jobs, JPMorgan Chase, Robert Samuelson, salaries, savings, savings rate, spending, temporary jobs, volatility, wages, {What's Left of) Our Economy

After his last clunker attempting to debunk claims of a U.S. employment recovery led by lousy jobs, Washington Post columnist Robert Samuelson owed us a good piece. I’m pleased to say he’s delivered with this morning’s effort examining the roots of the consumer caution witnessed since the Great Recession ended.

First, however, let’s specify that “caution” is a relative concept here. Yes, Americans are spending much less of their income these days than they did during the bubble decade – when it hit all-time lows. In fact, in July, 2005, the personal savings rate, which measures that relationship, sank to 1.9 percent, and some news reports back in those days said that it actually went negative that whole year (though it seems that figure has been revised). All the same, even the 1.9 percent figure showing up in the government’s tables now is much lower than the 5.6 percent for last month reported this morning by the Commerce Department.

Yet although it’s clear that savings have been growing on a monthly basis since late 2013, they’re still not close to their highs earlier in the recovery, when the rate regularly hit high single digits. And for decades until the last massive spending and housing bubble, high single-digit savings rates were the American norm.  In other words, the nation knew how to expand the economy in ways other than launching shopping sprees.

Nonetheless, since U.S. growth is still so spending-heavy, any sign of slackening is at least a short-term cause for concern. And Samuelson’s column today presented a great explanation. On top of still being burdened by accumulated debts and understandably gun-shy after the worst economic downturn since the Great Depression, Americans are facing a labor market in which employers increasingly treat them as more disposable than ever before. Principally, more and more businesses are looking at their employees as variable costs, which they can and should reduce whenever possible even in normal times to boost profits, rather than as fixed costs, which they’re stuck with except when economic conditions worsen significantly.

The resulting move toward using temporary workers has lowered employers’ costs both by giving them more flexibility and by enabling them to use more workers who can’t command significant benefits. But as Samuelson observes, these trends also creates much more economic insecurity for those workers, and logically a greater reluctance to spend.

In addition, Samuelson points out, this insecurity is being reinforced by ever more flexible compensation practices. Fewer and fewer workers are earning wages and salaries that are regularly and predictably increased (when possible via some combination of their bargaining power and their employers’ finances). Compensation increases that are handed out increasingly consist of various one-time payments that don’t need to be added to base wage and salary structures, and therefore can be withdrawn at the drop of a hat.

I’d just add two points. First, it looks very much like increasingly flexible employment and pay practices by business are showing up in statistics on how much Americans are earning. According to a recent major study from JPMorgan Chase, between October, 2012 and December of last year, 84 percent of Americans saw their incomes change by more than five percent month-to-month. Even year-to-year, when smaller fluctuations would be the norm, 70 percent of Americans still experienced such large income swings.

Even more noteworthy, 26 percent of the 2.5 million Americans examined by JPMorgan Chase saw their incomes rise or fall (mainly rise, fortunately) by more than 30 percent between 2013 and 2014. Forty-four percent experienced swings of between five and 30 percent. And this volatility was somewhat greater among higher income Americans than among lower.

Second, although U.S. businesses may see their workers are increasingly disposable, the American economy can’t afford nowadays to see consumers – most of whom are workers – in this dismissive light. Indeed, as I’ve just written, personal consumption is just about as great a share of the economy these days as it was during the bubble decade.

Combine an economy that remains consumption-heavy with income sources that are becoming less and less reliable, and it’s no mystery why what meager growth the nation can still generate remains so greatly fueled by ever greater indebtedness – and why the Federal Reserve is so reluctant to end America’s addiction to easy money.

(What’s Left of) Our Economy: The Trickle of Savings from Cheap Oil

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an economy built to last, cheap oil, consumers, consumption, gasoline, GDP, growth, spending, {What's Left of) Our Economy

We just got some good news about the impact of cheap oil on American consumers in 2014, and the likely effects in 2015. In the process, we got an important lesson in presenting data in context.

According to no less than AAA, last year, cratering oil prices saved Americans $14 billion on motor fuel, and the total could reach $75 billion this year. What’s not to like?

But these figures also warn against viewing cheap gas as a game-changer for the U.S. economy.  The reason? In the third quarter of this year – during which the economy grew by an excellent annualized 6.27 percent before inflation – consumer spending was running at an annualized rate of just over $12 trillion. So the gasoline savings equaled less than 0.12 percent of that total.

Even if the gasoline savings do hit the AAA’s most optimistic $75 billion level, they would only amount to 0.62 percent of the 2014 consumer spending total. And if the growth of overall consumer spending matched this year’s 4.20 percent pre-inflation rate over the third quarter of 2013, the cheap oil effect will be even smaller proportionately.

The $75 billion in gasoline savings is of course a bigger (21.50 percent) share of the annualized $348.7 billion in consumer spending growth from quarter to quarter. But it’s only a little over a tenth of the $727.5 billion in total annualized growth during that period.

Moreover, the gasoline savings will only boost growth if they result in even more spending on goods and services generated domestically.  As indicated in this previous post, that’s far from the case.  In fact, even if consumers simply substituted non-gasoline spending for spending on other domestic output, the growth effect would be nil. And every dollar of imports bought with these savings, or put into the bank or under the mattress, actually slows growth.

Further, the gasoline bonanza may actually move America farther from President Obama’s goal of creating “an economy built to last” – i.e., less reliant on binge-borrowing and buying, and financial gimmickry, and more on turning out conventional goods and services. For although cheap gas might in theory boost spending on net on domestic goods and services, it’s at least as likely that it will reduce the value of domestic energy production – and leave the economy more consumption-heavy than ever.

(What’s Left of) Our Economy: About Cheap Oil as a Christmas Present

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consumers, GDP, growth, holiday shopping, imports, oil, prices, production, spending, {What's Left of) Our Economy

The economics, business, and media worlds are gushing (couldn’t resist the pun!) with predictions that dramatic recent cuts in oil prices will give American consumers and the economy as a whole a big Christmas present. The reasoning: With lots of money freed up to spend on other goods, the nation will be handed the equivalent of a big tax cut, and the resulting higher consumption will boost the gross domestic product (GDP).

A Scrooge-like “Bah, humbug!” is too strong a reaction to these claims. But a quick review of how spending affects growth, and a look at the actual numbers, show that lots of skepticism is in order.

The notion that spending creates output (and therefore growth) seems as obvious as it is appealing – especially in the consumption-heavy U.S. economy. But it’s woefully incomplete. What’s important for Americans is that what creates output (and therefore jobs) in the United States is spending on goods and services originating in the United States. Spending on imports creates output, too – but in the country they come from, not in America.

(Some analysts claim that imports create U.S. output and employment, too, because they generate activity in transportation, warehousing, wholesaling, and retailing. But that’s a bogus argument because domestically produced goods and services generate this activity, too – and it comes on top of the production-generated output that imports can’t provide.)

So it should start getting obvious why the oil price bonanza’s effects are likely to be a significant disappointment. Let’s take the impact on holiday shopping. Although I haven’t looked at the data in recent years, I have found lots of evidence supporting what most of us know intuitively – that the overwhelming share of the Christmas and Hannukah presents we buy are made overseas. While researching this article for The Christian Science Monitor, I discovered that in 2009, between 95 percent and 99 percent of all American purchases of such popular gift items as most games and toys, gloves and mittens, athletic wear, and women’s and girls’ coats were imported. Import shares were somewhat lower, but still dominant, for products like men’s and boy’s coats, neckties and scarves, and power-driven hand-tools.

Those calculations couldn’t be performed for 2011, when the article was published, but data was available showing that imports as such for Christmas goods categories had risen 5.8 percent that year – considerably faster than overall economic growth. Similarly, I don’t yet have the Christmas goods-specific numbers for this year so far, but all consumer goods imports (and this category excludes food) are up 3.94 percent this year.

That’s actually slightly slower than the 4.08 percent gross domestic product growth registered so far this year (all these figures are pre-inflation). But it’s still inconceivable that American-made gift items have boosted their market share much – even with the kind of manufacturing renaissance that manifestly has not taken place. Bottom line: An oil-produced windfall for holiday shoppers as such won’t redound much to America’s benefit.

But there’s one more short-term complication. Lots of the petroleum used in the United States is imported, too – 33 percent last year, according to the U.S. Energy Information Administration. So far this year, oil imports are down 8.36 percent, which is great from both an economic growth and a national security standpoint. This development, too, however, muddies the economy bonanza story. For it means that, whereas in years past, fewer consumer dollars spent on imported oil could have mainly translated into more dollars spent on other imports (Christmas gifts), now fewer dollars spent on oil will mean fewer dollars spent on something that is increasingly Made in America. So in this sense, the oil price windfall could in theory actually subtract from the economy.

Not that the effects of lower oil prices on the American economy will be confined to the trade-off with other consumer spending, even beyond the holidays. Oil powers much of the country’s industry and provides vast quantities of chemical feedstocks, too.  The energy revolution is also responsible for a growing share of production growth itself (which means that workers in the energy complex itself may take a job or wage hit, too). At the same time, simply by reducing imports and therefore the nation’s trade deficit, cheaper oil has already juiced growth and should continue curbing the shortfall.  Moreover, the price of oil, its inevitable fluctuations, and the equally inevitable lag in their impact, mean that the story will play out with plenty of ups and downs over time.

It’s not even clear that consumers will spend all or even most of their oil windfall, as opposed to saving it – over any timeframe. What does seem clear is that believing in oil to supercharge the holiday shopping season is about as reasonable as believing in Santa Claus.