The increase in spending by the general public during the Easter holiday shows two signs of recovery of the American consumer. As U.S. consumer confidence rose to 52.5 from 46.4 in one month, it shows that the average consumer is feeling more confident and thus spending more. Similarly, as consumer confidence has risen amid the recent recession, the growth in Easter holiday weekend spending in recent years suggest that the U.S. consumer is spending more of their disposable income in non-essential goods. Does this growth in the Easter holiday period suggest that consumer confidence is on the rise to what was deemed normal in the past?
Sunday, April 4, 2010
U.S. Easter Spending Will Increase for First Time Since 2007
U.S. consumers plan to spend as much as $14 billion on candy-filled baskets, lamb dinners, and coloured eggs for the Easter holiday weekend. The projected 1.8% growth would be the first increase in Easter holiday spending in three years. According to IBISWorld, a Los Angeles based research firm, spending for the same period fell 8.3% in 2009 and 1% in 2008, which attributes the increase with food, candy, and clothing sales leading the way, which provides a sign of the U.S. consumer that non-essential purchases are rebounding. George Van Horn, a senior analyst at IBISWorld, "Consumers are still favouring need versus want, but volume is up as people become more confident." The Conference Board's index of U.S. consumer confidence rose to 52.5 in March, an increase from 46.4 in February.
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I agree with the idea of this article that, from the increasing spending on Easter holiday, consumer’s confidence is increasing. And as mentioned in this article, there is another reason of this phenomenon that the U.S. consumer is spending more of their disposable income in non-essential goods, which, from another perspective, one can see the recovery of the entire economy.
ReplyDeleteAlright. As consumer confidence is increasing and spending is increasing, which is all a good thing, is it all a cover for the fourth ranked highest spending periods of the year in the United States? The Easter holiday weekend is the forth highest spending periods for American consumers behind Christmas, Valentine's Day, and Thanksgiving.
ReplyDeleteSo as it shows that that recovery is on the rise, because this is one of the traditional spending periods for the U.S. consumer, is it a true indicator of the true state of the American consumer or is it false hope?
Johnny, you definitely make a very valid point about the falsity associated with relying on these figures. I was going to add that because consumer spending, even during the recession, typically spikes over the holiday periods and thus this may reflect a false sense of hope. However, I find it interesting that this is the largest recorded spending since 2007, which could show that the decline in consumer confidence experienced over the last 3 years is actually on the rise again as the economy continues to try and rebound.
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