White House: Consumer Spending Will Decline Unless Congress Averts Fiscal Cliff

November 26, 2012

It was a blockbuster weekend for retailers, as Americans took advantage of big discounts to ring in the holiday shopping season. But you wouldn't know it from the reaction on Wall Street. Financial markets were sharply lower Monday after White House economists warned that consumers could put the brakes on spending if Congress allows the country to fall off a so-called "fiscal cliff."

A new poll shows a whopping 247 million shoppers visited stores and websites over the Thanksgiving weekend.

Black Friday - the unofficial start to the holiday shopping season - easily exceeded expectations, living up to its name as the day retailers finally get out of the red and start making a profit.

The National Retail Federation says holiday shoppers spent about $423 per person, pushing the haul for the 4-day shopping weekend to nearly $60 billion - up nearly 13 percent for the same time last year.

Retail analyst Marshal Cohen calls it a good start.

"Black Friday ,good or bad, isn't the indication of how retail will fare for the whole year, but it is a good sign that the consumer has shown up," said Cohen.

Consumer spending is critical to the U.S. economy, accounting for about 70 percent of total economic activity.

But Monday, the White House warned that failure by Congress to reach a budget deal by the end of the year could put a serious crimp on consumer spending.