A new poll from Gallup suggests that consumers are in the mood to spend – and spend generously – at the upcoming holiday season. How much will they spend? What percentage of Americans say they’ll spend less? Or more? Read below to see the results of this surprising poll…
Gallup’s poll suggests a couple of consumer spending records coming…
As long-time readers of Strata-gee likely know, I have been warning of economic red flags suggesting our economy was slowing, and potentially moving towards a recession since last August. The U.S. economy is incredibly complex and there are many hundreds of various elemental signals and dozens of high level indicators. It stands to reason that after more than 10-years of economic expansion, some form of correction must come.
But a complicating factor is that 7/10ths of the economy is consumer spending related. The consumer gets a say in how the economy progresses – if they feel confident in their future, they spend…if they feel uneasy about the future, they save. And divining the consumer sentiment is a difficult business.
Relying on Polls to Take the Consumer Temperature
To accomplish this, most businesses rely on various surveys, such as this latest one from Gallup, called the Gallup Poll Social Series, which looked at consumer sentiment going into the 2019 holidays including how much they planned to spend on gift purchases.
Conducted with more than 1,500 consumers over the age of 18 from all 50 states over the first half of October 2019, the last possible moment before holiday purchasing really begins to heat up, this poll suggests U.S. retailers are going to have a very good season indeed. In fact, a couple of elements in this regular annual survey by Gallup actually sets new records!
Consumers’ Record-Making Holiday Spending Plans
NOTE: There is a mind-blowing part of this story, which I encourage you to read on to discover…unless you don’t like your mind blown!
Some of the top line conclusions drawn from the results of this poll are really quite impressive. For example, consumers expect to spend on average $942 on Christmas and holiday gifts this year. This amount is 6.4% higher than the $885 reported in October 2018. In fact, it is the highest amount that consumers have ever planned on spending in fully 17-years (the period of time for which this data has been collected).
As impressive as that number is, consider this: almost 4 out of 10 (37%) of respondents reported that they plan on spending $1,000 or more on gifts this year. Not only is that up dramatically from the 33% of respondents who said that last year – it too is a record result for this October survey.
More results from this surprising survey:
- 21% plan on spending between $500-$999 on holiday gifts
- 27% will spend between $100-$499 on gifts
- 3% will spend less than $100 this holiday
- 7% say they will spend $0 on gifts this year (includes those who say they don’t celebrate the holidays)
- 3% said they don’t yet know how much they will spend on gifts
Gallup researchers then asked respondents to compare their spending plans for this year with last year – are they spending the same…or more…or less? Here too, we find some revealing numbers.
Spending Plan This Year Versus Actual Spend Last Year
As you might suspect, the greatest number of respondents – 65% – indicated that their holiday spending plan for this year is “About the Same” as they spent last year. No real surprise there, as this has been the largest group since Gallup began conducting this poll annually back in 1990.
However, Gallup seemed a little surprised that for only the second time in the 17-year history of this poll, a greater number of consumers plan on spending more this year (18%) than spend less (16%). The other year that happened was in 2017 and that 16% reporting lower spending intentions was a record low. That means this 2019 survey ties that record low.
Typically, More Spend Less Than More
It is interesting to note that typically over this survey’s history, the number of consumers who say they plan on spending less on the holidays is higher than the number who say they will spend more. Gallup seems to find it particularly significant when these streams cross with more respondents reporting that they plan on spending more.
However, Gallup warns that these plans can change…and change dramatically. Last year, after forecasting that they would spend $885 in October 2018 – when Gallup repeated the survey in November 2018…just one month later…consumers then said that they would only spend a total of $794. The market researcher said that this was one of “the biggest within-season drops in consumers’ holiday spending estimate that Gallup has measured.”
So what blew my mind as I was reporting on this story? Gallup had recently published another survey with the title: “Economic Confidence Drops to Lowest Level Since Shutdown.” This poll had some VERY disturbing numbers on consumer sentiment – nearly half of all consumers (49%) said a recession was coming, perhaps as early as just next year…and 48% said they believe the economy is getting worse.
When was this poll reported? The results were reported on September 20, 2019 – just 10 days before Gallup began polling for this holiday spending survey. Wow – what a turnaround in consumer sentiment!