Playing with Numbers

Last week I read that spending (last weekend) in Retail Stores and online was 3% higher than the past year’s sales. In addition the average consumer spent 7% more than they did during the same weekend last year.

The article coupled these facts with the fact that the on sale (deeply discounted) items on Black Friday were less expensive this year. And that this was an indication that consumer confidence was coming back.

I love facts, figures and statistics. Why? Because, they are easy to distort to suit one’s needs. The Government and the Media do this constantly. The bad thing is that many people believe it.

The question that should be asked is; why, in an uncertain economy, have people increased their spending.

My answer is simple.

Let’s say that last year during the first 27 days of November I consumed 100 gallons of Gasoline at an average cost of $3.29 per gallon. This equals $329. And that this year I used 95 gallons (I learned how to conserve during the $4 per gallon July) at an average cost of $1.89 per gallon. This equals roughly $180. Therefore this year in the month of November I’ve spent $149 less than last year (all other things remaining the same).

Wow, now I have more money in my bank account.

Now let’s say that last year I spent $350 (very close to the average) over the Holiday weekend. This year I spent 7% more or roughly $374. This means I still have $125 more than last year, at this time, in my bank account.

Therefore I haven’t increased my spending. I’m actually spending less than I did last year. I’m just diverting my dollars from one sector of the economy to another.

The Beach Bum