Don't Put an Economic Recovery on Your Christmas List

1. In 2008, gift sales accounted for less than 13% of Q4 GDP, a rate that Mark Zandi, chief economist at Economy.com, expects us to see again this year. Not bad, but not enough.

2. Past years gave us a holiday season bolstered by easy credit. Well, we see where that got us. Consumers cut their borrowing by 0.6% from July through October, the Federal Reserve says, which will help keep wallets clamped shut.

3. Throughout the year, consumers have been pouring their extra cash into paying down their debt. It seems pretty unlikely that they'll deviate for the holidays. From the second quarter to the third this year, consumers paid down $100 billion in household debt, bringing the total amount outstanding to $13.6 trillion.

4. Unemployment, doubtless, remains a concern. It's still in the 10% neighborhood, meaning that even the employed are going to be careful with their cash. The Fed expects unemployment to stay around 8% into 2010, so we'll be living with this for a while.

5. More of us will be using cash -- 80%, actually. This makes it easier to maintain a bit more spending discipline, which doesn't work out too well for the retailers.

Where the holiday season's results become important is as a barometer of broader economic conditions. Consumer spending dominates the U.S. economy, accounting for 70% of it. A solid Christmas could be a sign of the recovery to come, but we won't be toasting it New Year's Eve.