What Recession? Holiday Spending Expected to Rise
Easing fears the Economic Grinch will steal Christmas, the CNBC Holiday Central Survey finds that Americans appear ready to increase their holiday spending a healthy 6% over last year to $782. But downbeat views on housing and the economy are sapping some of the holiday cheer.
As housing and economic worries have captured the public's attention, Americans eased back spending plans but not to the disastrous levels some feared. While up from a year ago, spending plans did decline 16% from the last survey in October and views on the economy and housing could be responsible.
The percentage of Americans homeowners expecting a decrease in their home price has grown to 16% from 9%. An American who believes his home price will decrease in the next 12 months will spend 23% less, or $110, this holiday season than the average American. Fortunately, most Americans don't believe their home prices will decline.
About a third still believe their home values will increase over the next year, down from 40% in March. The average expected growth in home prices is just 2.2%, about half the expectation from October. Still, half of Americans expect their home price to stay the same over the next year and the survey shows their holiday spending will be more than $100 higher than average.
Americans are relatively downbeat on the economy. Nearly three-quarters rate the economy "only fair" or "poor." An American who rates the economy as poor will spend 13% less than the average.
The Holiday Central Survey also finds:
CNBC's Starbucks Indicator: 1 in 9 polled say they're cutting back on their high-priced coffee purchases. A whopping two-thirds of Americans say they don't drink premium coffee drinks at all.
Discounts Matter: 3 out of every 4 Americans say discount and holiday sales are critical in determining where to shop and what to buy.
Big Boxes Rule, Online Is Cool: Big Box stores like Wal-Mart are still the prime destination for holiday shopping, but they've lost some ground to online shopping.
Holiday Payback: While nearly half of Americans won't have leftover debt following their shopping when the Christmas Season, a full 23% will still be in debt more than two months after the holidays.
Wii Nation: Last holiday season, Americans were split as to which console they wanted: Wii, XBox360 of PlayStation3. They're split no longer... Amongst consumers who have a specific video game console in mind, nearly 80% are looking for a Wii.