At the beginning of the holiday shopping season, there was a surge of stories about how Black Friday sales went through the roof, that consumers had austerity fatigue, that they were ready to spend again, and that this would boost economic growth. Certainly some economic indicators showed that over the past month or so. However, today’s statistics show otherwise. It turns out that consumer spending basically stalled in November.

U.S. consumer spending rose less than expected in November as tepid income growth put a squeeze on households, according to a government report on Friday that suggested slowing momentum in demand […]

The Commerce Department said consumer spending ticked up 0.1 percent after rising by the same margin in October.

Economists polled by Reuters had expected spending, which accounts for two-thirds of U.S. economic activity, to rise 0.3 percent last month.

“It’s suggesting some softness in the consumer sector. We are not in a recession, but growth is not especially strong either. We did get the extension on the payroll tax cut, which is going to help the consumer outlook in the first half of next year. The market has largely priced that in already,” said Scott Brown, chief economist for Raymond James.

Many economists believe that the good data in the fourth quarter could be chalked up to a variety of temporary factors. This suggests that all the numbers in the quarter aren’t even that good.

Meanwhile, the holiday shopping season is ending with a thud.

Half off at the entire store at Ann Taylor. Sixty percent at Gap. Forty percent off almost everything at Abercrombie & Fitch.

Aggressive last-minute deals in the days before Christmas are good for procrastinators, but they could be an alarm bell for the retail industry.

While scattered markdowns are standard every year, discounts across entire stores — which analysts say are more widespread than last year — suggest merchants are stuck with too much merchandise.

“It’s really a game of chicken,” said David Bassuk, managing director and head of the retail practice at the consultant firm AlixPartners.

So retailers increased inventories in anticipation of a big shopping season, and because it hasn’t materialized, they have slashed prices to clear out the inventory. That’s not a sign of a well-functioning economy.

If businesses get stuck with a lot of inventory heading into 2012, the first quarter could be a tough one for the economy. Remember that consumer spending accounts for close to 70% of GDP.

I should balance this by noting that durable goods orders jumped in November, but it was largely boosted by a rise in purchases of airplanes, and I don’t see how you can sustain an economy entirely on that kind of purchase. At some point you have enough airplanes.