It was reported that there was a surge for online shopping over the weekend. This could imply that shoppers are choosing to bypass heavy advertising, logistical and rental cost of retailers that is pass onto customers.
Online shopping may appear cheaper than buying from shops but shipping cost may equal that or reduce the savings. As spenders starts tilting towards online shopping, it may be a good sign, that these shoppers are getting savvy with their money, to avoid paying unnecessary higher cost.
However, there are two things negative thoughts that crossed my mind. Would this mean retailers will start to suffer the blunt of lesser business, thereby less job creation? Also, as people shop online, they are spending on credit. This may attribute further to the credit woes of some. Credit card users often overspend due to the transparent credit spending till month end.
The US economy comprises of about 25% of the total world activity, with consumers being responsible for about 70% of US economy activity. Any pull back in spending could lower global growth, especially in countries relying heavily on exports to US. The impact of the US economy is a concern to many parts of the world.
Let's hope unemployment does not rise sharply as it will aggravate the economy further, and closer to a possible recession. "As to whether a US recession would spill over to the rest of the world, opinions are split,'' says Marco Annunziata, chief economist at UniCredit Markets. "Some strongly believe in decoupling and look forward to watching the giant collapse, while the rest of the world powers on, while others believe we would all be hurt.'' (source : http://news.yahoo.com/s/ft/20071124/bs_ft/fto112320072258005142;_ylt=ApxCE3zxyXbboav1Oi3mQryyBhIF)
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