Are Americans really learning?

There's no question that we are in a recession. The job market is ugly. House values are worse. And it's best to not even mention stocks.


And so many articles are offering up all sorts of evidence that Americans have officially learned their lesson (for now, at least) and are attempting to be frugal and struggle out of debt. I can't count how many articles I've seen on this. Anecdotal evidence swoops in, and suddenly we're all back to the hard-hitting Depression-era.


I'm not convinced.


Before you start yelling, I know that many Americans did finally wake up and smell the $5 coffee. Certainly Americans are suddenly more conscious of their debt and where, exactly, past excesses have landed them. There are many people out there who are severely cutting down: selling off designer items, becoming a one-car household, and even (gasp) planning meals around what's on sale that week.


But, by and large, has America really into this frugality thing? I think that most citizens grasped onto frugality as a life preserver in their sea of debt. Now, though, they're realizing just how far away the shore is. Don't get me wrong, they'll keep holding on to the life preserver as long as necessary. But not a second more.


For example, the business world decried the holiday season as awful. What was so terrible? Well, total holiday retail sales were down 5% for November, 8% in December, compared to last year.


Remember how many people said they were severely cutting back this Christmas? If even the majority of them had followed through on this intent, wouldn't we have seen double-digit declines overall?


It's pretty easy to do, really. I was catching up with a friend today. I asked what he got/gave for Christmas. Originally, they weren't going to get each other anything, since they are in debt. But his wife told him she had her eye on a $90 present for him. So then he had to go out and find things for her. I'm guessing that was a common story in many households.


Of course, some areas did take major hits, mostly the high-end items.



This looks pretty dismal, but remember that all these negatives average out to around 6.5% ((5%+8%)/2) for the total period. So about a quarter of the would-be iPhone buyers opted out. Fewer cell phones and other gadgets got purchased.


But most of us read stories about the phenomenal season for video games and their consoles. November saw a 10% jump in video game sales. And game console numbers weren't exactly bad, either.


And, today, at the mall for the second time in two days, we had to fight to get a parking space. (I needed new shoes.) The mall was full of plenty of folks. Not all of them had bags. In fact, perhaps every 5th set of people had them. But it's hard to use this as a gauge, since people all enter and leave and different times.


What I do know is that the retailers keep hawking the sales. And it seems to at least be getting people to the mall out of curiosity. Whether they succumb to the temptation, I don't know. Only later data will let us figure that out. But they're there, and that's certainly dangerous enough, given how recently people were charging to supreme excess.


Old habits die hard -- cliche but true. If Americans are so wed to this new frugal lifestyle, they would know to avoid temptation. Malls can no longer offer entertainment, just more debt. Deep down, they probably know this. But the sales are just too alluring.


Of course, there's nothing wrong with bargain shopping. The day after Christmas, Tim and I went to the malls to hit some good deals. We got a silver ornament for $3 and got it engraved with our names and anniversary for $19 more. At the same store, we got four silver frames that we can use as future gifts. At 75% off, we spent under $10 for each.


I think we're already seeing the beginnings of frugal burnout. For upwards of 6 months, people have had to scale back severely and suddenly. Holidays made them chafe under the leash of a budget. But after-holiday sales are just the proverbial straw.


My guess is more and more people will start to backslide. Of course, this is normal. But in this economy, they can't afford to.


Time will tell if my predictions are accurate. And what effect it will have on the economy -- retail sales, credit card companies, and bankruptcy rates.


In the meantime, what trends have you noticed? What sales have you hit and what items did you actually buy?