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Retail shares were boosted Tuesday on news that the Federal government will attempt to revive stalled credit card lending.  But most experts still expect this to be a dismal holiday shopping season for the industry.  

Retailers big and small are gearing up for what’s usually their biggest day of the year – the Friday after Thanksgiving, dubbed Black Friday as it’s when rocketing sales send many companies into profit for the year.  But with the world financial system in crisis, and consumer confidence at all time lows, Economist Don Klepper Smith of DataCore Partners in New Haven says the effects of job losses, and the housing and stock market downturn are usually measurable in consumer spending.

“For every dollar you lose in the value of your home, you basically spend seven cents less in the near-term economy.  And with stocks that ‘wealth effect’ is five cents.  So with housing prices being down about $25,000 on a median basis, that basically implies about $1,600 less in personal consumption, which will obviously have an impact on retailers this holiday shopping season.” 

The Federal Reserve has unveiled a new loan facility aimed specifically at supporting consumer debt like credit cards, auto loans and student loans.  Major retailers saw their shares jump on the news, but many will not be celebrating until they see what effect it has on consumers’ willingness to open their wallets.