WASHINGTON — Consumers plan to open their wallets a bit more this holiday season over last year's, but will still be more restrained in their spending than in prior years, according to a new poll conducted by CUNA and the Consumer Federation of America.
The survey found that in 2009 43% of consumers said they intend to cut back their holiday spending, compared to 55% last year. But the 43% figure is still much higher than in the previous eight years of 2000 to 2007, a period when the percentage intending to spend less never exceeded 35% and dipped as low as 21% (in 2002).
"Consumers are telling us they will not cut back as much on spending as last year, but more so than in previous years," said CUNA Chief Economist Bill Hampel. "Moreover, only 8% said they planned to spend more than last year, and this was the lowest percentage we have seen in the past 10 years."
Consumers are not feeling the holiday cheer when it comes to their finances, with far more consumers saying their situation is worse (36%) than better (19%), though nearly half (44%) said their situation was about the same as that in 2008.
When consumers were asked about their top concerns, worries over the economy topped the list (35.6%) as it did in 2008 (36.1%), with more this year saying that unemployment or the prospect of reduced job hours or pay were at the heart of those concerns.
Twenty-four percent said they were concerned about meeting monthly credit card payments this year, compared to 28% last year, while 42% said they were concerned about meeting all debt payments this year, compared to 48% last year.
"During these recessionary times more people have been seeking to pay down debt and build up their savings," added Hampel.
CUNA said the most striking findings could be seen in demographic difference; between those with less than $50,000 in annual income and those with more than this amount. The lower-income group is far more likely (51%) than the higher one (38%) to say they will spend less.
More in the lower-income group (42%) than the higher one (32%) also said their financial situation is worse today than a year ago, and those earning under $50,000 also expressed more concern (58%) than the higher-income group (32%) about meeting their debt payments. The former also report they are far more likely than the latter to use a $5,000 windfall to pay off debt rather than add to savings, and to rely on borrowing rather than saving to meet an unexpected $5,000 expense.
