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Obamanomics Continued: Retail Sector Flops during Christmas Season
Posted By AIM Newswire On December 29, 2012 @ 1:30 am In AIM Newswire | No Comments
WASHINGTON — Initial reports coming from market analysts concur that this past Christmas shopping season has been one of the worst on record since the 2008 economic crisis. It now has forced retailers to mark down prices even further to get rid of excess inventory that they had not been able to sell during the holiday season.
It does not bode well for the future of the American economy if Obamanomics continues like it has the past four years. According to estimates, the retail sector posted a 0.7% increase in profits this Christmas season, compared to 2% last year. This hurts retailers, some of whom bank heavily on the Christmas season to create between 30% and 50% of their profits for the year.
Retailers such as Wal-Mart and Gap, Inc. are expected to do well from the Christmas holiday sales, but the likes of J.C. Penney and Barnes & Noble may suffer big losses. Why is this happening, you may ask?
Analysts said that the looming fiscal cliff issue is hindering not only investors in the stock market, but also consumers who are wary of tax increases. As economic theory suggests, if there is an impending tax, then consumers tend to spend less and save more. But, if there is a tax cut coming up, they tend to plan future purchases and spend more.
If only the Nobel Peace Prize winner Barack Obama could understand basic economic theory.
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