Stores were packed during Thanksgiving weekend, but shoppers were cautious about how much they spent.
The National Retail Federation says total spending over the four-day holiday weekend fell 2.7 percent from last year. That has to be unnerving for retailers, but it could lead to even more sales that could benefit consumers.
Despite the unusual drop in spending, the retail trade group still expects sales for the entire holiday season to rise by nearly 4 percent. Some analysts say the decline may be due to the earlier than usual sales, spreading out the buying binge that customarily starts on Black Friday.
But online sales have been strong, and are expected to be better than ever today, which is known as Cyber Monday. Almost half of the people surveyed by Nielsen say they plan to shop online. That's up substantially from last year.
ComScore (SCOR) says online sales during the Thanksgiving/Black Friday period rose a better-than-expected 17 percent from a year ago. The most visited sites were Amazon (AMZN), eBay (EBAY), Walmart (WMT), Best Buy (BBY) and Target (TGT), according to ComScore.
FedEx (FDX) says Monday will be its busiest day ever, with 22 million packages handled. By the way, the term Cyber Monday is just 8 years old. Not surprisingly, it was coined by the online industry.
On "60 Minutes" Sunday, Amazon offered an intriguing glimpse of the future that promises delivery of your purchase within minutes of placing your order. CEO Jeff Bezos said the company has been working on a plan to deliver your packages by drone. He said the company has the technology, but regulatory approval is still an issue. The story lit up on Twitter, with mostly negative comments.
Here on Wall Street, the Dow Jones industrial average (^DJI) and the Standard & Poor's 500 index (^GPSC) edged just slightly higher in last week's holiday-shortened trading, while the Nasdaq composite index (^IXIC) rose 1.7 percent. But for all of November, the Dow jumped 540 points, or 3.5 percent.
And historically, December is the best month of the year for the Dow and it's second best for the S&P.
-Produced by Drew Trachtenberg.
6 Popular Tax Breaks That Could Disappear in 2014
Money Minute: Consumers Rein In Spending; FedEx Girds for Cyber Monday
Usually, if borrowers have part of their debt written off or forgiven, they have to treat that amount as taxable income. But in the aftermath of the housing market's implosion, homeowners who defaulted on their mortgages and had their bank write off or forgive part or all of their loans weren't required to claim the forgiven amount as income. The Mortgage Forgiveness Debt Relief Act of 2007, which created this provision, has been extended before, but now, with home prices recovering somewhat, the incentive to preserve this provision is starting to fade. That makes it more likely that the mortgage-debt forgiveness provisions might not get renewed for 2014.
Federal tax law has allowed taxpayers to deduct state and local income taxes for years, but for the 57 million people who live in states that don't charge income tax, those provisions didn't provide any relief. That changed in 2004, when lawmakers allowed taxpayers to choose instead to take a similar deduction for sales taxes. The provision, which was originally slated to expire at the end of 2007, has been repeatedly extended by Congress. Over the years, it has provided $16.4 billion in deductions to affected taxpayers.
Teachers from kindergarten to high school are allowed to deduct up to $250 for money they spend buying supplies for their classrooms. This deduction's available even to those who don't itemize, making it more valuable than most deductions. According to figures from The Tax Institute at H&R Block, more than 3.6 million teachers took advantage of this provision in 2010 to deduct $915 million in expenses. This deduction has been extended regularly ever since its initially scheduled expiration in 2005, so, even though it's on the chopping block again, it's a pretty good bet that lawmakers will let the tax break survive into 2014.
These provisions allow certain taxpayers to deduct between $2,000 and $4,000 of qualified educational costs. This provision was also retroactively reinstated for 2012 at the beginning of this year. The difference, though, is that other tax breaks also exist for educational expenses, including the Lifetime Learning Credit and the American Opportunity Credit. (You have to pick either the tuition and fees deduction, or one of the two education credits. You're not allowed to double-dip.) Those tax credits makes it less crucial to extend the tuition deduction, although it's still a better deal for many people: The Tax Institute at H&R Block says that 2 million taxpayers used it to write off $4.36 billion in expenses in 2010.
Since 2006, taxpayers could claim a credit on certain expenses for remodeling their homes to make them more energy efficient. Currently, the maximum lifetime credit amount is $500, but amounts were higher in the past, and more than 43.5 million taxpayers have claimed an average of more than $765 using the credit.
Congress commonly waits until late in the year to extend expiring tax provisions like these, as well as others not mentioned above, such as the exemption for charitable IRA distributions, deductions for mortgage insurance premiums, and the higher immediate write-off amounts for small-business equipment purchases.
Lawmakers often use what's known as a tax-extenders bill to pass all the extensions in a single package. Earlier this month, WOTC Coalition President Paul Suplizio said that a seemingly unrelated Medicare-payments bill was probably the first step toward a year-end tax extenders bill that would cover expiring tax breaks like these.
And, just as millions of Americans procrastinate until April 15 to file their taxes, we can expect lawmakers to wait until Dec. 31 -- or beyond -- to decide the fate of these tax breaks.