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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Blue Christmas Seen

Standard & Poor's released its holiday spending forecast and it's dismal: The agency predicts the worst Christmas sales in 10 years.

S&P predicts holiday spending will actually be down about 2 percent compared to last year.

If that doesn't sound so bad, given the current crisis, consider the comparison: For each of the past 10 years, holiday spending has risen at an average rate of 4.4 percent per year. This Christmas appears to be on track to be the worst since the one following the Sept. 11, 2001, terrorist attacks.

What does this mean for the U.S. economy?

Plenty. About 70 percent of the U.S. Gross Domestic Product is based on consumer spending.

A separate survey of the top marketing execs of 100 retailers predicted this morning that holiday sales will drop about 2.7 percent this year.

The bad holiday spending news should surprise no one. Even one of the characters in AMC's TV drama "Mad Men" -- set at a 1962 advertising firm -- succinctly summed up spending habits during the show's season finale last night, which took place during another crisis -- the Cuban missile one: "When times are good, people buy things. When they're not, they don't."

-- Frank Ahrens

By Frank Ahrens  |  October 27, 2008; 12:41 PM ET
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The ad is saying London calling here, so I'm thinking about that now.

What does this mean for the U.S. economy?
It's governed by the 90-10 rule.

Posted by: moonpenn | October 27, 2008 6:10 PM | Report abuse

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