With the recent decline in gasoline prices, consumers are pocketing an estimated $40 billion in the fourth quarter of 2014. And, they’re itching to spend it this coming holiday season.
Money Burning a Hole in Our Pockets
According to the Morgan Stanley U.S. Economic Report (1) for the final quarter of 2014, year-over-year household incomes will jump by at least $40 billion, and possibly more, should gas prices remain low or fall further. That will bring an estimated 4% increase in holiday spending over 2013.
How much more you might ask? A recent Nielsen Company (2) research report suggests that a “majority of households plan to drop (spend) between $250 and $500” with more “households earning over $50,000 planning to spend between $500 and $1,000”.
The Most Wonderful Time of the Year
The National Retail Federation (3) notes that “90 percent of Americans celebrated Christmas, Kwanza or Hanukah, “making this the biggest holiday season of all”. In 2013, all households spent $730 on gifts, food, decorations and more on average. Adding to the windfall of money to spend, consumer confidence in the U.S. is on an upward climb. Though the recession lingers, the improved health of the job market, housing, and lower inflation rates is giving consumers the confidence to spend and not save this new-found wealth.
Black Friday is Too Late for Some
Consumers are at the doors waiting for the sales to begin. Nielsen reports that 22% of consumers started their holiday shopping in October. Online shopping leads the pack for shoppers seeking that special something this coming season. But, bricks-and-mortar locations are seeing demand increasing as well with mass merchandisers and club stores attracting more shoppers than seen in 2013.