According to this article, consumer confidence decreased for the fourth straight month. The Conference Board shows that the consumer confidence index dipped to 125.5 in November. It was expected to rise- economists polled by Dow Jones expected the index to rise to 126.6 from 126.1 in October.
The article also states that the situation index also fell from 173.5 to 166.9. These numbers suggest that economic growth in the final quarter of 2019 will remain weak. One of the last things the article states is that expectations for the holiday shopping season are strong. The National Retail Federation expects sales to grow by about 4% from last year.
If this is the case, my question is, how much does a drop in CPI impact holiday spending? Could CPI be very low and holiday spending still be very high?
Holiday spending expectations are still very high so if that comes to fruition then CPI will not really impact how well businesses do. This may actually help consumer confidence rise because people are more willing to spend when prices are lower.
ReplyDeleteConsumer spending during the holiday season of Christmas is typically inelastic as it is the highest sales period of the year. I believe that a drop in the CPI will most likely have very little to no effect on spending.
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