HOLIDAY SPENDING DECREASING
updated 11/24/14 03:53 PM
CFA and CUNA Survey Reports
Expect lower consumer holiday spending in 2014 compared to 2013 based on the 15th annual holiday spending survey conducted by the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA). The survey looked at a variety of spending factors such as income changes, financial condition, debt repayments, and savings.
According to the survey, 10 percent of respondents said they would spend more this holiday season compared to 13 percent in 2013. Also, 33 percent said they would spend less, a 1 percent increase from last year.
Despite the spending restraint, signs ranging from a lower unemployment rate to higher stock prices indicate that the U.S. economy is stronger this year than last. When asked to compare their current income with their income a year ago, 27 percent of survey respondents said it was higher, while only 21 percent said it was lower. When asked to compare their financial situation with that of a year ago, 28 percent said it was better while only 24 percent said it was worse.
“Top-line results from an economic perspective are encouraging and holiday spending almost certainly will increase this year,” said Mike Schenk, CUNA senior economist. “However, elements of our survey underscore the fact many consumers continue to reflect significant concerns about their personal finances- most especially in the realm of weak income gains. Because of this we expect the increase in holiday spending this season to be modest.”
The survey also showed a continuing widening gap between high and low income groups. Thirty-four percent of those with household incomes under $25,000, compared to only 13 percent of those with incomes over $100,000, said their financial condition was worse now than a year ago.
Responses about debt and savings help explain income differences related to how one would use an unexpected windfall of $5,000. More than half of the low income group, but little more than one-quarter of the high income group, said they would use most of these funds to pay down debt. In contrast, only about 32 percent of the low income group and 56 percent of the high income group said they would use most of the funds to add to savings or investments.
CUNA and CFA have come up with tips to help consumers spend prudently and not taking on too much debt this holiday season. Click here for the suggestions to share with your members.
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