Shopping Season More Critical

This year,the holiday shopping season is even more critical than it usually is.The Reuters/University of Michigan's consumer sentiment index for October was released today.It showed a decline from 70.6 in September to 66.0.This does not bode well for consumer spending.Although earnings have been generally good to this point,a lot,but by no means all, of the success is down to cost-cutting.Companies have shown a remarkable capacity for increasing efficiency.At some point,however,the consumer is going to have to step up more than they have done so far.If not now,the biggest shopping period of the year,when?If they do not step up now,we are looking at the significant possibility of a stagflation scenario.That would overshadow the good spirits that have characterized the equity markets of late.One can only hope the pocketbooks will open in time to avert all manner of difficulty.