While turkey, stuffing and cranberry dressing have been American holiday traditions for generations, retailers have a tradition of their own: Black Friday.

Starting in the late 1800s, many retailers began sponsoring Thanksgiving Day parades to draw potential customers into commercial districts and provide a not-so-subtle hint that the holiday shopping season had commenced. The Macy’s Thanksgiving Day Parade, which began in the 1920s, is probably the best-known example of this tactic. Since then, the Friday following Thanksgiving has become one of the year’s busiest shopping days.

This year’s Black Friday was no exception, even as the US economy continues to suffer from a serious post-financial crisis hangover. Americans reportedly spent an estimated $11.2 billion in brick-and-mortar stores–down 1.8 percent from last year–while online shopping receipts totaled just over $1 billion, the first time that level has been broken and a nearly 30 percent jump from last year.

Not content with just one day though, online retailers have helped fuel a new holiday tradition: Cyber Monday. Since the advent of the Internet, retailers and entrepreneurs have used it as a tool to separate consumers from more of their money. They’ve been pretty successful at it too, with employers reporting that their workers spend more time shopping on the Internet than actually doing their jobs. Online retail sales are expected to top $1.5 billion today, a 20 percent increase from a year ago.

That should amount to a holly, jolly holiday season for retailers this year. But how long can the party go on?

Although numerous economic indicators have been subject to extreme oscillations this year–everything from weekly jobless claims and the unemployment rate to auto sales and consumer confidence–retail sales have been surprisingly steady. Maybe shoppers simply decided to shake off the pall of negativity that’s been hanging over them for the better part of three years. Regardless of the reason, retailers have reported surprisingly strong sales this year despite the anemic economy.

While shares of discount retailer Family Dollar Stores (NYSE: FDO) have returned 21.6 percent so far this year, with less volatility than Macy’s (NYSE: M) stock, the latter has performed even better, with a gain of nearly 30 percent. And the high-end retailer actually increased its earnings guidance by a nickel per share in the third quarter.

That kind of optimism has been a rare bird lately, with most companies warning to the downside. However, the retail space has been one of the top-performing subsectors this year, as evidenced by SPDR S&P Retail’s (NYSE: XRT) nearly 20 percent return this year versus just under 8 percent for the S&P 500.

But that holiday cheer could get doused with cold water if Congress and the president fail to negotiate a resolution to the dreaded fiscal cliff.

That term encompasses the looming spending cuts and tax increases slated to take effect at the outset of next year. Among its many consequences, more than 2 million Americans face the prospect of their unemployment benefits expiring. That’s about 40 percent of those drawing jobless benefits today.

Because the US has struggled through a recovery with surprisingly weak job creation, Congress has extended federal unemployment benefits eight times over the past four years. But it’s been more than a year since the last extension was passed, so hundreds of thousands of jobless workers have been dropping off the unemployment rolls throughout 2012. But with a number of federal unemployment assistance programs set to expire on Dec. 31, nearly everyone collecting federal unemployment assistance will see their benefits conclude at the end of the year.

While economists have debated whether the federal government’s nearly unprecedented generosity has discouraged the jobless to actually find work, one point that isn’t really open to debate is that those extended benefits have helped prop up consumer confidence–and thereby retailers–for some time now.

That means consumer confidence is bound to take a hit and drag down retail sales along with it. I suspect the retail picture already isn’t as rosy as the huge increase in online sales might suggest.

Retailers seemed to be actively encouraging more shoppers to do their buying online this year, as many offered better deals through their websites than in their stores. Between price reductions and free shipping offers, retailers were able to make higher margins online since they didn’t have to pay as much overhead to generate those sales. As these promotions roll off, retailers will see their sales roll off with them. In other words, retailers simply used Black Friday to pull more demand forward this year, while penny-pinching consumers tried to get the most bang for their buck.

Needless to say, I’m skeptical that consumer spending will remain as steady next year. If you want to play the retail sector, you should be very selective and not get sucked into the euphoria that’s been pushing SDPR S&P Retail higher all year.

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