Gallup makes its measurement of shopping attitudes based on the strength of the dollar amount people plan to spend. For 2017, the number represents a surge from last year. It is holiday research report, the survey firm commented:
Gallup’s initial measure of consumers’ 2017 Christmas shopping plans suggests retailers could see the best holiday sales in years. The chief indicator is a sharp increase in the amount Americans say they plan to spend on Christmas gifts — now $906, up from $785 in October 2016. That represents one of the biggest year-over-year increases in Gallup’s trend, pushing the spending projection to its highest level in a decade.
As should be expected, the Great Recession caused a collapse in the sum spent per holiday. After hitting $909 in 2007, it fell to $715 in 2010 and $712 in 2011. Even over the course of the entire recovery spending has not gotten back to the pre-recession level.
Gallup also points out that a fairly large number of people will spend more this year than last:
When asked to say how their expected spending compares with last year, a record-low 16% say they will spend less and 17% say they will spend more. As is typical, the largest share, now 65%, say their spending will be about the same. However, this is the first year since 2000 that roughly equal percentages plan to spend more vs. less. More often, a much higher proportion of consumers have said they plan to spend less rather than more.
The trend will not reach to crippled retailers like J.C. Penney (NYSE: JCP), Macy’s (NYSE: M), and the Sears and Kmart divisions of Sears Holdings (NASDAQ: SHLD), if recent history is a reasonable way to forecast. On the other hand, if Amazon’s (NASDAQ: AMZN) third quarter earnings and its fourth quarter forecast turn out to be correct, its success will have foundations both in its market share and consumer activity in general.
Holiday spending will be another example of a strong U.S. economy, if Gallup is right. Unfortunately, the trend will be uneven across the retail industry
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