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Americans returned to stores for the “Black Friday” kickoff of the holiday shopping season, but online data shows that consumers have been spending big for weeks amid worries over shortages.

The day after the U.S. Thanksgiving celebration is the traditional start to the holiday shopping season, and normally sees Americans line up outside stores before they open to clinch deals on popular items.

After the pandemic kept crowds away last year, many shoppers were out in force Friday, a sign of how COVID-19 vaccines have returned life in the United States to something closer to normal.

“I just wanted to make sure that this Christmas was a good Christmas for all my friends and family,” said a masked Sylvia Gonzalez as she waited in line outside the jewelry chain Pandora in New York.

But even before retailers opened their doors early Friday morning, e-commerce shoppers in the United States had already spent $76 billion since early November, up more than 20% from the year-ago period, according to data from software company Adobe, which has projected somewhat fewer promotions this year in light of rising costs.

The jump has added to companies’ optimism about the season, suggesting some shoppers heeded calls from businesses to purchase items early this year after port backlogs and other logistics problems sparked worries that popular goods would be in short supply.

Toys led the buying spree, with Adobe pointing to actions by “anxious parents increasingly aware of supply chain challenges.”

The National Retail Federation projects overall spending could rise as much as 10.5% to $859 billion.

Nonetheless, out-of-stock listings online are up 261% compared with two years ago, according to Adobe.

Item in hand

Retailers and market watchers are broadly optimistic about the holiday shopping season in light of low unemployment and relatively strong household finances due in part to pandemic stimulus bills enacted by the government.

Countering those positive trends are lingering supply chain problems, spiking consumer prices that have affected household staples such as food and fuel, and the COVID-19 pandemic, which is still far from over.

On Friday, stock markets worldwide tumbled on worries that the latest strain of the virus found in South Africa could derail the global recovery.

Reminders of the pandemic were visible throughout shopping districts in the New York borough of Manhattan.

Signs at Macy’s reminded customers to keep 2 meters apart, and pop-up COVID-19 testing sites were positioned outside stores where mostly masked crowds were large, but not as sizeable as before the pandemic.

“In 2018, it was more like the New York you heard of,” said German tourist Ilke Zienteck. “Now, it’s a little bit like a small town.”

Still, the hum of customers inside shops suggested that many had adjusted to the “new normal” of pandemic living.

There were obvious gaps at some stores. At a Best Buy near Grand Central Station, a shelf of Apple accessories was almost completely empty, while the camera bags section had few remaining offerings.

Other chains like Victoria’s Secret and Foot Locker have acknowledged shortages of some choice products.

Taylor Schreiner, a digital research expert at Adobe, expects more consumers to order online and pay for expedited shipping, or pick up goods at stores.

“It’s not just because people want it quickly,” he said in an interview. “Having the item in hand is the surest way to have the gift for the person.”

January glut?

An emerging worry in the industry is that retailers will be stuck with goods originally intended for the holidays but that don’t arrive until January.

Macy’s is generally canceling orders for items with a Christmas motif but plans to keep other items if they are cold-weather-oriented and could sell later in the winter, executives said earlier this month.

Gap Chief Financial Officer Katrina O’Connell said the apparel chain was planning to hold some items for next winter.

“If we think items are going to be too late for the holiday season, we won’t put them in stores or online and have them generate markdowns,” she said earlier this week on a conference call with Wall Street analysts. “We’ll hold them for next year.”

Gap has been one of the companies hardest hit by supply chain problems due to lengthy factory shutdowns in Vietnam caused by the country’s COVID-19 restrictions, which contributed to a loss of some $300 million in sales in the most recent quarter. 

 
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In early October, a ruptured underwater pipeline spilled crude oil in the waters off the Southern California coast. Almost two months later, life in Huntington Beach is back to normal, but residents say the reputation of the tourist city has been damaged and businesses are still hurting. Genia Dulot reports
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Global stocks tumbled Friday and oil fell below $80 a barrel after news of a possibly vaccine-resistant coronavirus variant sent investors scurrying to the safety of bonds, the yen and the Swiss franc.

Little is known of the variant, detected in South Africa, Botswana and Hong Kong, but scientists say it has an unusual combination of mutations, may be able to evade immune responses and could be more transmissible.

British authorities think it is the most significant variant to date and have hurried to impose travel restrictions on southern Africa, as did Japan, the Czech Republic and Italy on Friday. 

The European Union also said it aimed to halt air travel from the region.

“Markets have been quite complacent about the pandemic for a while, partly because economies have been able to withstand the impact of selective lockdown measures. But we can see from the new emergency brakes on air travel that there will be  

ramifications for the price of oil,” said Chris Scicluna, head of economic research at Daiwa.

The World Health Organization is convening an experts’ meeting later Friday to evaluate whether the new variant is a “variant of concern.”

Global shares fell 0.8% and were on course for their worst week since early October.

European stocks plunged 2.7%, on track for their worst day since September 2020, with travel and leisure stocks particularly badly hit.

Germany’s DAX sank 3% and Britain’s FTSE 100 fell 2.7% to its lowest in more than a month.

MSCI’s index of Asian shares outside Japan fell 2.2%, its sharpest drop since August. 

Casino and beverage shares were hammered in Hong Kong, while travel stocks dropped in Sydney and Tokyo.

Japan’s Nikkei skidded 2.5% and S&P 500 futures were last down 1.8%.

Giles Coghlan, chief currency analyst at HYCM, a brokerage, said the closure of the U.S. market for the Thanksgiving holiday Thursday had exacerbated moves.

“We need to see how transmissible this variant is, is it able to evade the vaccines – this is crucial,” Coghlan said.

“I expect this story to drag on for a few days until scientists have a better understanding of it.”

Oil prices slid, with U.S. crude futures down 5.7% to $73.96 a barrel and Brent crude down 4.66% to $78.38 amid fresh demand fears.

As investors dashed for safe-haven assets, the yen jumped more than 1% to around 113 per dollar, having languished earlier this week at five-year lows.

The euro rose 0.4% to $1.1251, as safety rather than policy differentials drove trade.

The single currency, however, fell to near 6-1/2 year lows against the Swiss franc at 1.044 francs per euro.

“You shoot first and ask questions later when this sort of news erupts,” said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.

South Africa’s rand fell 2% to a one-year low and its 2030 bond yield soared 25.5 basis points (bps).

Bond yields move inversely to price.

Other bond markets strengthened, benefiting from their safe haven status. Ten-year Treasury yields fell 11 bps to 1.5277% and 30-year yields were down 9 bps to

1.8777%. Germany’s 10-year bond yield was down 6.2 bps at -0.31%. Gold rose 0.7% to $1,800 an ounce.

The market swings come against a backdrop of already growing concern about COVID-19 outbreaks driving restrictions on movement and activity in Europe and beyond.

European countries have expanded COVID-19 booster vaccinations and tightened curbs. Slovakia announced a two-week lockdown, the Czech government will shut bars early and Germany crossed the threshold of 100,000 COVID-19-related deaths.

“I don’t think there’s any going back to the pre-COVID-19 world,” said Mark Arnold, chief investment officer at Hyperion Asset Management in Brisbane.

“We’re just going to get mutations through time and that’s going to change the way people operate in the economy. That’s just reality.”
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The United States has decided to almost double the duties on Canadian softwood lumber from most producers to 17.9%, Canadian Trade Minister Mary Ng said on Wednesday, adding that Canada is “extremely disappointed.”

The current rate for most companies is about 9%.

Ng said that the U.S. Department of Commerce on Wednesday issued the final results of the second administrative reviews of its anti-dumping and countervailing duty orders regarding certain softwood lumber products from Canada.

“Canada is extremely disappointed that the United States has decided to increase the unfair duties it is imposing on Canadian softwood lumber from most producers to 17.9%,” Ng said in a statement. “Canada calls on the United States to cease imposing these unwarranted duties on Canadian softwood lumber products.”

The U.S. Commerce Department and the U.S. Trade Representative’s office did not respond to a request for comment on Wednesday night. Earlier this year, Washington announced plans to double the duties on imports of Canadian lumber and requested a dispute panel on Canada’s dairy import quotas.

Canada’s softwood lumber industry is a key component of the country’s forestry sector, which contributed more than $25 billion to the nation’s gross domestic product in 2020 and employed nearly 185,000 workers. The British Columbia Lumber Trade Council also expressed disappointment.

Ng said that “following completion of any legal challenges under the Canada-United States-Mexico Agreement’s (CUSMA) Chapter 10 or in U.S. courts, these new anti-dumping and countervailing duty rates will apply retroactively to softwood lumber exports to the United States from companies that were subject to the second administrative reviews.”

“These unjustified duties harm Canadian communities, businesses, and workers,” she said, adding: “They are also a tax on U.S. consumers.” 
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Persistently high prices for gasoline are frustrating many Americans and causing a political headache for the administration of President Joe Biden, but they also might be accelerating the process of transitioning the country to more widespread use of vehicles that run on renewable energy — particularly electricity. 

 

Experts say that sales of electric vehicles, or EVs, tend to rise when fuel prices do, though they cautioned it’s difficult to draw a straight line from prices at the pump to car purchases. 

 

“People buy electric cars for lots of reasons, so they’re not completely dependent on gas prices, but that’s certainly reinforcing it,” said Genevieve Cullen, president of the Electric Drive Transportation Association, a trade group representing manufacturers of electric vehicles.

 

An estimated 468,000 new EVs were sold in the U.S. from the beginning of the year through September, according to data collected by Atlas Public Policy, a group that tracks the market for EVs. That represents a 45%  increase over the 323,000 EVs sold during the entirety of 2020. 

 

Looking solely at the month of September 2021, U.S. consumers bought 57,000 new EVs. That was 63% more than the 35,000 sold in September of 2020, and a 90% increase over the 30,000 sold in September 2019. 

Gas prices make EVs attractive 

 

According to the Bureau of Labor Statistics, the cost of one kilowatt hour of electricity in the United States rose from 13.5 cents in October 2020 to 14.2 cents in October 2021, an increase of 5.2%. By contrast, the BLS found the average cost of a gallon of gas rose from $2.23 in October 2020 to $3.48 in October 2021, a 56.1% increase. 

 

“High gas prices are tough on Americans driving gasoline vehicles,” said Luke Tonachel, director of clean vehicles and fuels for the Natural Resources Defense Council. “The volatility in the global price of the oil used to make gasoline is a constant worry.

 

In the U.S., though, the structure of the electricity market keeps prices from increasing sharply. 

 

“Electricity prices are regulated, and therefore quite stable,” said Tonachel. “An EV driver can expect to pay a quarter or less as much per mile as [someone] driving a gasoline vehicle.” 

 

US EV sales expected to rise further 

While electric vehicle sales are rising rapidly, the numbers begin from a low baseline. As recently as five years ago, EV sales accounted for less than 1% of new vehicles sold in the U.S. That figure has surged to what is expected to be about 4% this year, and the real increase is on the horizon. 

 

LMC Automotive, which tracks vehicle sales and estimates the future of the market, projects that by 2030, EVs, including purely electric cars and plug-in hybrid cars that can run on both electricity and gasoline, will make up 34.2% of new vehicle sales in the United States. 

 

That transition will continue, as the federal government increasingly crafts policies meant to bring the country in line with President Biden’s promise, made at the recent United Nations Climate Conference, to cut U.S. greenhouse gas emissions to about half of their 2005 levels by 2030. 

 

The Environmental Protection Agency announced this summer it would structure emissions guidelines for cars powered by internal combustion engines in order to “speed the transition of the light-duty vehicle fleet toward a zero emissions future.” 

 

“We’re going to see the car market accelerate the shift to EVs when the U.S. EPA sets emission standards that zero out pollution from vehicles,” said Tonachel. “That’s ultimately what we need to address the climate crisis, and it will result in cheaper mobility, too.” 

 

Another factor is the continued rollout of a network of charging stations across the country. The Energy Department currently lists more than 52,000 stations in the country, with upwards of 100,000 outlets. The infrastructure bill that President Biden recently signed into law contains $7.5 billion aimed at increasing that number by a factor of 10 within the next decade. 

 

Broader future for renewables 

 

There also is reason to believe that increased electrification of the transportation system will drive the adoption of renewables in other aspects of day-to-day life, as well. That’s because, as car battery technology continues to improve, it will make it easier and cheaper to store energy generated by wind and solar power sources. 

 

“Electrification of transportation is the key to growing renewables in the power sector,” said Cullen, of the Electric Drive Transportation Association. “Because batteries are one of the few effective and portable ways to store electricity. They’ll enable utilities and other power generators to manage demand so that you can save up excess wind or solar.” 

 

She added, “Battery storage is the path there. Electric transportation, this mobile electrical load, has the ability to be a grid asset.” 

 
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