WASHINGTON – Holiday spending will see a “modest bump” this year, but it will be held back by budget concerns of those at the lower end of the income scale who have not seen salaries grow like those who are better off.
That was the finding of the annual forecast of holiday spending released earlier this week by the Consumer Federation of America and the Credit Union National Association.
“Many consumers continue to reflect significant concerns about their personal finances — most especially in the realm of weak income gains,” said Mike Schenck, senior economist for CUNA. “Because of this, we expect the increase in holiday spending this season to be modest.”
While lower unemployment and higher stock prices signal an improving economy and should translate into more spending during the holidays, it appears that will happen only among those who have more to spend, the report said.
That is likely to hold true in Arizona, as well, where some people are still working to get out of the hole they found themselves in during the recession.
“A lot of people in Arizona got caught up in high-debt situations,” said Kelly Griffith, executive director for the Tucson-based Center for Economic Integrity. The center is affiliated with the Consumer Federation of America.
The CFA and CUNA conducted a nationwide telephone survey of 1,009 people, by land line and cellphone, from Oct. 30 to Nov. 2, to get its outlook for the coming holiday. The margin of error was plus or minus 3 percentage points.
The survey indicated that although higher-income earners will be spending more this year, most consumers will spend the same as they did during the recession.
It said that just 22 percent of those earning less than $25,000 a year had seen their income grow over the past year, while 45 percent of those in the six-figure range have more income now than they did a year ago.
That lack of upward income mobility translates to more conservative holiday spending nationally, Schenck said.
Stephen Brobeck, CFA executive director, believes the report’s findings illustrate the widening income gap in this country.
“During the great recession, some consumers were thrashing around financially, but quite a large number were sinking,” Brobeck said. “The rising economic tide has not raised all boats equally.”
In Arizona, the boats have barely moved at all. The Census Bureau’s American Community Survey reported in September that Arizona’s median income changed only $10 from 2012 to 2013 — and that change was downward, from $48,520 to $48,510.
Griffith said many people in the state are still struggling to make payments on things like high-interest mortgage loans, which means most Arizonans will likely do their holiday shopping with a close eye on the budget.
“Arizona consumers are not going to be spending as much because they don’t have as much,” she said.