WASHINGTON–Consumers are saying they intend to spend slightly less money this holiday season than they did in 2014, according to the 16th annual holiday spending survey conducted by the Consumer Federation of America (CFA) and CUNA.
In both years, however, the survey found the same percentage (10%) said they would spend more; however, more people this year (38%) than last (33%) said they would reduce their spending.
“Holiday spending is likely to rise by 2.5% to 3% from last year’s level” said CUNA Chief Economist Bill Hampel. “Although positive, that would be a disappointing increase considering the improved financial condition of US households.”
Despite the touch of Scrooge (pre-ghost visit), the CFA-CUNA survey also revealed signs that the economic recovery continues. The proportion who reported an improved financial condition, compared to the previous year, continued to increase, as the following table reveals.
In addition, those who said they had sufficient “extra funds” to “pay for an unexpected expense of $1,000” continued to increase from 2012 (the first year the question was asked), as the table below indicates.
“Despite lingering public dissatisfaction with the slow rates of growth, our survey reveals some improvement in the financial condition of Americans,” noted Stephen Brobeck, Executive Director of the Consumer Federation of America. “Still, the fact that more than two-fifths of Americans report that they lack sufficient extra funds to cover an unexpected $1,000 expense is cause for concern,” he added. Also, the surveyed revealed that the proportion who said they are concerned about meeting monthly debt payments remained high and unchanged, from last year, at 43%.
Not surprisingly, the variable that explains expected spending and reported financial condition the most is income, said CUNA in a released statement. The higher one’s income, the less likely one is to report financial distress and deterioration, as the table below suggests.
According to CFA/CUNA, correlating spending plans with financial condition reveals that those reporting a worse financial situation, concern about making debt payments, and lack of extra funds for emergencies are predictive of expecting to spend less money this holiday season.
CUNA and the CFO also offered tip for shopping “cooperatively” this season by patronizing cooperatives, including urging consumers to join a credit union or to search for cooperatives in their communities. The organizations also reminded that companies such as REI, Ace Hardware and True Value are all cooperatives.