A new survey indicates that during this year's holiday season consumers are feeling a bit more Grinch-like.
The fourth annual survey sponsored by the Consumer Federation of America (CFA) and CUNA found consumers saying they would restrain their spending as the result of lingering concerns about the economy, their level of indebtedness and a greater interest in paying off debt.
The survey of more than 1,000 representative adult Americans was conducted in mid-November by the Opinion Research Corporation International.
When consumers were asked whether they intend to spend more or less during this holiday season than last year's, about one-third (34%) said they planned to spend less. Last year, a much smaller percentage of consumers (21%) said they would restrain spending.
The percentage of people who said they intend to spend more at the holidays was unchanged from a year ago (15%). The increase in those planning to spend less came at the expense of those saying they plan to spend about the same as last year. That percentage fell from 61% to 50%.
"The jump in consumers saying they will spend less compared to more during the holidays is a bit surprising," said CUNA Chief Economist Bill Hampel. "It suggests that many households are not yet convinced that the recession is completely behind them."
Similar to the 2002 survey, nearly one-half (46%) of those surveyed said they are concerned when asked about "meeting your monthly payments on all types of debt other than your mortgage." And well over one-half of those concerned (28% of everyone) said they are "very concerned."
Those groups who are most likely to say they are concerned were: African-Americans (76%); those with incomes below $25,000 (62%); those 18-24 (61%), and those with kids (53%).
Those groups most likely to say they are not concerned are: those with incomes over $75,000 (29%); those 65 years of age and older (29%), and those without children (41%).
Those surveyed this year expressed greater interest in paying down debt. In response to the question-"What would you do with a $5,000 windfall?"-more said "pay down some debt" (46%) than "add to savings or investments" (37%), "spend it" (15%), or other responses. That compares to only 40% who, last year, said they would use the windfall to pay down debts.
"Their great concern about making consumer debt payments, and their growing interest in paying down these debts, help explain why more Americans plan to spend less this holiday season than last year," said CFA Executive Director Stephen Brobeck. "Those particularly concerned about paying off consumer debts are women, African Americans, young adults, those with children, and those with lower incomes," he added.
