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Cold start for Black Friday sales Solid start to Black Friday deals
(about 7 hours later)
The US Christmas shopping season, expected to be the weakest in five years, has started with queuing shoppers braving the cold. The US Christmas shopping season got under way on Friday, with shoppers braving the cold to look for bargains.
On what is traditionally known as "Black Friday", many shops open their doors at midnight or before dawn.On what is traditionally known as "Black Friday", many shops open their doors at midnight or before dawn.
Laptops, televisions, toys and clothes are among the most popular items. Laptops, televisions, toys and clothes are among the most popular items, as shoppers hunted out discounts.
And despite a gloomy prognosis many big name stories reported bigger crowds for the early morning bargains than they did a year ago.
The National Retail Federation predicts combined November and December holiday sales will grow by 4%, the slowest since 2001, when sales were up 1.3%.The National Retail Federation predicts combined November and December holiday sales will grow by 4%, the slowest since 2001, when sales were up 1.3%.
The cautious outlook has been caused by a falling US housing market, a credit crunch, and rising food and fuel costs.
"Retailers knew they had to offer promotions enticing enough to get shoppers out of bed on a chilly day, and they delivered," said Tracy Mullin, chief executive of the National Retail Federation.
"Though retailers are anticipating a challenging holiday season, they are encouraged by the enthusiasm that their Black Friday sales generated."
'Further deterioration''Further deterioration'
The Thanksgiving weekend accounts for about 10% of all holiday sales.The Thanksgiving weekend accounts for about 10% of all holiday sales.
Black Friday, one of the busiest shopping days of the year, used to be the day when a lot of retailers turned profits - literally going into the black - for the whole year.Black Friday, one of the busiest shopping days of the year, used to be the day when a lot of retailers turned profits - literally going into the black - for the whole year.
The holiday season will be terrible Ian Shepherdson, High Frequency Economics In pictures: Black FridayThe holiday season will be terrible Ian Shepherdson, High Frequency Economics In pictures: Black Friday
This year stores started offering discounts and extended their working hours several weeks ago, expecting a difficult time ahead.This year stores started offering discounts and extended their working hours several weeks ago, expecting a difficult time ahead.
With US economic growth hit by the downturn in the housing market, and the knock-on credit crisis, recent data has shown a sharp fall in retail spending.
And as US consumers seem less willing or able to spend, most retail analysts expect this downturn to continue.
"The holiday season will be terrible," said economist Ian Shepherdson.
Higher petrol prices and volatile financial markets have also hit US consumers.
The most recent official data from the Commerce Department showed that retail sales rose by just 0.2% in October, compared with September's 0.7% gain.The most recent official data from the Commerce Department showed that retail sales rose by just 0.2% in October, compared with September's 0.7% gain.
Shoppers braved freezing conditionsShoppers braved freezing conditions
At the same time, some of America's largest retail firms, such as Macy's, Limited Brands, JC Penny and Nordstrom, all saw same-store sales fall last month.At the same time, some of America's largest retail firms, such as Macy's, Limited Brands, JC Penny and Nordstrom, all saw same-store sales fall last month.
"We expect a further deterioration as consumers cut back in the face of soaring petrol prices, falling stock prices and the continued disaster in housing," said Mr Shepherdson, who works for research group High Frequency Economics.
Slowing growth
The downturn in the housing market has centred on record levels of mortgage defaults in the so-called sub-prime sector, which specialises in higher risk loans to people with poor credit histories, or those on lower incomes.The downturn in the housing market has centred on record levels of mortgage defaults in the so-called sub-prime sector, which specialises in higher risk loans to people with poor credit histories, or those on lower incomes.
Most of the main US banks have subsequently lost billions of dollars after having to write-off their exposure to this bad debt.Most of the main US banks have subsequently lost billions of dollars after having to write-off their exposure to this bad debt.
The crisis has made the banks much less willing to lend among themselves or to other borrowers, both reducing and pushing up the price of available credit.The crisis has made the banks much less willing to lend among themselves or to other borrowers, both reducing and pushing up the price of available credit.
America's central bank, the Federal Reserve, has confirmed that economic growth is now slowing.America's central bank, the Federal Reserve, has confirmed that economic growth is now slowing.
Earlier this week it cut its forecast for 2008's economic growth to a range of 1.8% to 2.5%. Previously it has predicted growth of between 2.5% and 2.75% for next year.Earlier this week it cut its forecast for 2008's economic growth to a range of 1.8% to 2.5%. Previously it has predicted growth of between 2.5% and 2.75% for next year.