CNBC All-America Economic Survey: CNBC's Steve Liesman: Why Many Americans Aren't Spending More This Holiday Season
By:Steve Liesman | CNBC Senior Economics Reporter
| Thursday, 6 Dec 2012
Despite the public being more upbeat on the economy than it was ayear ago, the CNBC All-America Economic Survey found holiday spending will bevirtually flat as uncertainty and "fiscal cliff" concernsweigh on consumers.
Americans plan to spend $742 on average buying gifts, comparedwith actual spending of $740 in 2011 reported by the National RetailFederation. The number remains muted even though Americans are as optimisticabout expected pay hikes as they've been since just after the recession began.
The percentage of Americans who said the economy is poor fell to44 percent from 61 percent a year ago; most of that change ended up in thosesaying the economy is just fair, which grew to 41 percent of the public from 30percent. Only 14 percent said the economy is excellent or good, up from 8percent.
Americans look for 4.3 percent wage gains over the next year, morethan double what they expected last Christmas and as high as it's been sinceFebruary 2008. Those believing their wages will go up will spend 60 percentmore than those who believe their paychecks will stay the same or decrease. (ReadMore: Planning for Your TaxesNext Year? Good Luck.)
Another bright spot: Americans believe their home prices will risefor the third quarter in a row, the first time that's happened since 2007. Thegains, however, are muted with an average expected increase of just 0.1 percetexpected over the next 12 months.
On the fiscal cliff, 70 percent of Americans said they have heardabout the issue, compared with 91 percent who told pollsters in April 2012 thatthey were aware of the Trayvon Martin shooting. Just about as many Americanshave heard of the Facebook initial public offering as haveheard of the fiscal cliff. (Read More: Geithner: We Will Fall Of 'Cliff' IfTaxes Don't Rise.)
Some 48 percent of Americans said there will be an agreement toavoid the automatic spending cuts and tax increases with 43 percent saying itis unlikely. A year ago, 73 percent said an agreement on the deficit issue wasunlikely. More Independents and Republicans think a deal is unlikely now; theoverall number is driven by the 60 percent of Democrats who think the automaticspending cuts and tax increases scheduled for January will be avoided.
The survey found Americans will blame both parties equally if thenation goes over the fiscal cliff. Among the 805 Americans polled nationwide,raising taxes and capping deductions for those who earn more than $250,000 werethe most acceptable ways to cut the deficit. Reducing Medicare spending andraising the retirement age were the most unacceptable. (Read More: All America-Survey: Who's to Blame If'Cliff' Talks Fail?)
America's attitudes towards the stock market remain stuck in themud. Just a third of the public believe this is a good time to invest,virtually unchanged for almost 18 months. Before the recession, it was nearlyhalf. And only about half of the financial elite, those with incomes above$75,000 or more than $50,000 in the market, said it's a good time to invest,down from 70 percent before the recession.
Meanwhile, Americans come into the holiday season with about asmuch debt as they had a year ago. About half the public said they have a lot orsome debt, and about half respond that they have little or none. Among thosewith the least debt: retirees, people with income below $30,000 and those withmore than $50,000 in the stock market. Those with the most: the middle classwho report that they do not own stocks. (Read More: What Investors Should Do If We Go Overthe 'Cliff'.)
The more a person believes they have in debt, the less they arelikely to spend on holiday shopping. Those who say they have lots of debt saythey will spend $584 on average; those who say they have no debt will spend$910. About 14 percent of the public said they have "a lot of debt,"unchanged from a year ago.
—By CNBC's Steve Liesman; Follow him on Twitter: @steveliesman
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