The average American consumer plans to spend less on holiday gifts this year, according to a new Gallup poll. Gallup’s initial measure of Americans’ 2010 spending intentions found that people plan to spend about $715 on gifts, roughly on par with the $740 recorded in October 2009.
The muted nature of this year’s decline is reflected in consumers’ own evaluations of their spending changes. According to the Oct. 7-10 poll, 27% of Americans intend to spend less on the holidays this year than what they spent last year– higher than the 11% who now say they will spend more, but down from the 35% and 33% in 2008 and 2009 saying they would spend less.
Even if expenditures remain the same as last year, retailers have a great deal to fear. Most count on the last two months of the year for the lion’s share of their sales and, in some cases, all of their profits.
The lack of a recovery is almost certainly based on high unemployment and the desire of those who have jobs to avoid getting into debt. Retail firms have decided, in a number of cases, to add employees for the 2010 shopping season and have probably also aggressively increased inventory. If Gallup is right, those actions will have been a mistake.
The notion that many economists have is that the consumer can no longer be the engine of GDP and that exports will have to make up for that slack is accurate. It is the growth in exports which is in doubt.
Results for this survey are based on telephone interviews conducted Oct. 7-10, 2010, with a random sample of 1,025 adults, aged 18 and older, living in the continental U.S., selected using random-digit-dial sampling.
Douglas A. McIntyre