Holiday retail sales are flat, suggesting economic expansion is still struggling. J. Crew and Bloomingdale's were among those offering after-Christmas discounts of 75% or more.
It's "a lot better than it was three or four years ago," says Chris Christopher, senior principal economist for IHS Global Insight. "It looks OK, but when you take price increases into account, it doesn't look too good."
IHS Global Insight expects holiday sales to be 4.9% higher than last year. But Christopher says nearly half the increase is due to higher prices, and warns income isn't keeping up with spending. Consumer spending adjusted for inflation grew almost 4% in the fourth quarter last year, while prices were declining, he says. For the fourth quarter of this year, Christopher says he only expects growth of about 2.5%.